In 2005, after more than a decade of holding its exchange rate steady at close to 12.08 U.S. cents per yuan (or 8.28 yuan per dollar), Beijing took its first tentative steps toward giving its currency some freedom to float. Since then, the yuan has been allowed to appreciate more than 30 percent against the dollar to its current rate of 15.9 cents per yuan.
As shown above, this rise in the yuan’s value relative to the dollar has not been constant; Beijing froze the exchange rate for two years during the financial crisis to avoid harming its domestic economy. But since mid-2010, appreciation has continued, and just two weeks ago Beijing widened the “band” in which the exchange rate of the yuan is permitted to move on a daily basis.
Treasury Secretary Timothy F. Geithner said last week that China’s changed attitude on currency is “very significant and very promising.” He and other U.S. and Chinese officials are meeting in Beijing this week for the annual Strategic and Economic Dialogue, started under President George W. Bush in 2006.
Read more at CQ.com: Beyond the Yuan
About the Data
The Federal Reserve Board releases foreign exchange rates on a daily basis. The chart above uses average monthly figures from the G.5 series.