Analysts at UBS believe that Chinese yuan will keep gradually strengthening. In their view, this may happen due to multiple reasons, among which are the necessity to defuse international currency tensions and reduce the threat of trade protectionism, as well as to fight inflation and adjust the country’s economic structure.

However, China is expected to stay firm on its current monetary policy ignoring the external calls for faster and larger appreciation of its national currency as its monetary authorities are concerned about the state of the country’s exports sector.

UBS specialists believe that yuan’s trade-weighted index will rise by 5%/year during the next few years, while the pair USD/CNY will be trading at 6.5000-6.5500 by the end of 2010 and at 6.2000 by the end of the next year.

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