The Chinese currency hit a new high on Thursday, breaking the 7.13 mark to reach a central parity rate of 7.1209 yuan to one U.S. dollar.

The yuan, also know as the Renminbi, climbed 246 basis points from the previous trading day. It was the 18th new high for the yuan since the beginning of this year.

Observers said the appreciation was mainly caused by the overnight U.S. dollar decline.

The yuan has appreciated more than 13 percent since it was de-pegged from the dollar in July 2005. It climbed 6.9 percent against the dollar in 2007.

However, some U.S. critics said it remained undervalued, giving Chinese exporters an unfair advantage and contributing to the massive trade imbalance between the two countries.

Analysts held that the yuan's appreciation would help reduce the country's massive trade surplus, mop up excess liquidity and curb inflation.

They forecast that the Chinese currency would rise at least 7-10 percent against the U.S. dollar for the whole year.

China's trade surplus soared 47.7 percent in 2007 to 262.2 billion U.S. dollars over the previous year.

On Thursday, the Renminbi lost 528 basis points against the Unified European currency to 10.7643 yuan to one Euro. It gained 649 basis points against the British pounds to 14.1261 yuan to one pound, while it lost 392 basis points against Japanese currency on 6.7001 yuan to 100 Japanese yen.

(Xinhua News Agency February 28, 2008)