Yuan's rise expected to quicken

The yuan ended at 7.3041 on the last trading day of 2007. Some economists forecast a three percent to five percent gain for the currency.

The yuan has risen 13.2 percent since China dropped its decade-long peg to the US dollar on July 21, 2005.

Trading of the yuan last month - rising 0.9 percent in the last trading week of 2007 - indicated the currency will rise quicker this year.

The yuan frequently cracked new highs in the second half of last year.

China's inflation, the rising trade surplus and a weak US dollar are expected to support the yuan's continued rise this year.

The consumer price index, the main gauge of inflation, rose 6.9 percent in November, a more than decade high. Inflation for 2007 may top 4.7 percent, the highest since 1996, said Yao Jingyuan, the chief economist of the National Bureau of Statistics.

The People's Bank of China, the country's central bank, said at the end of 2007 that it will further use multi-monetary measures, including interest rates and foreign exchange, to control excess liquidity in the market.

Stephen Green, a Standard Chartered Bank senior economist, increased his forecast for the yuan in 2008. He predicted the yuan would reach 6.84 against the greenback at the end of this year, from a previous forecast of 7.00.