File Photo: A worker counts Chinese currency renminbi banknotes at a bank in Tancheng County of Linyi City, east China's Shandong Province, April 11, 2013. Photo:Xinhua

The Chinese yuan rose to the highest point in 31 months against the US dollar on Wednesday, as global investors rushed to buy Chinese yuan amid China's strong economic rebound and the continuing depreciation of the US dollar.

According to data released by the People's Bank of China (PBC), China's central bank, the yuan's central parity exchange rate against the US dollar stood at 6.4605 on Wednesday, which is the highest level since June 2018. 

It also recorded another strong surge over recent days, after the yuan rocketed up by nearly one percent in the first three trading days in 2021 compared with the last trading day of 2020. Last year, the yuan's reference rate surged by about six percent. 

Zhou Yu, director of the Research Center of International Finance at the Shanghai Academy of Social Sciences, said that the yuan's surge was partly a result of investors' inclination to purchase the yuan, which they thought as a safer asset considering the US dollar's recent depreciation and as China's economy staged a supercharged rebound over recent months. 

He also noted that the robust exports growth in China, which has resulted in current account surplus, has prompted the yuan to rise as more traders exchanged US dollars for the yuan. 

However, he anticipated that the yuan is unlikely to appreciate beyond 6 against the dollar this year, though it would continue to strengthen against the greenback.

"China's exports have not been affected too much by the appreciation, which might be because of the coronavirus-triggered production halt globally, as overseas buyers have no choice but to order from China. But when the coronavirus is controlled with help of vaccines, the negative impact of yuan's appreciation should show up more evidently," he told the Global Times. 

He also noted when the yuan reached 6.0 against the dollar, the government might take measures to control the appreciation trend. 

"Because of China's robust exports trend, the government has high tolerance of the yuan's surge, but I think there will be a limit," Zhou said. 

The onshore yuan rose by about 0.11 percent against the greenback as of 11:52 am, while offshore yuan fell by around 0.08 percent.