China yuan rate pegged at five-year high

image captionMany in the US say China is keeping the yuan low to boost exports

China has set the exchange rate for the yuan at its highest level in five years, after previously saying it would make the currency more flexible.

The move follows the G20 summit in Toronto that took place over the weekend.

China has come under increasing international pressure to allow the yuan to appreciate.

The US in particular has argued that the weak yuan gives Chinese exporters an unfair competitive advantage.

At the G20 meeting, Barack Obama expressed his hope again that China would allow the yuan to rise over the next few months.

However, analysts said they did not expect major movements in the currency any time soon.

China has said that it will not be pressured into moves by the international community that do not benefit its economy, and has ruled out a large, one-off move in the yuan's value.

Dollar peg

Chinese officials set the rate of exchange between the yuan and the US dollar each working day.

They allow it to trade within a narrow band of 0.5% above and below this figure.

On Monday, what is called the central parity rate was set at 6.789, the highest it has been since China unpegged the yuan in July 2005.

Between 2005 and 2008, China allowed the value of its currency to rise by 21%, before pegging it again to the dollar to help its exporters weather the global financial crisis.

Earlier this month, Beijing announced it would make the yuan more flexible again, and last week it raised the centre point for the currency's official trading band for the first time since the announcement.

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