(Yicai Global) Jan. 19 -- The onshore and offshore yuan exchange rates surpassed the 6.4 mark against the dollar today, marking two-year highs for both as the Chinese currency cements its spot as a multi-national currency.
The onshore redback rose strong after opening to reach 6.3984 at around 09:40 a.m., rising 200 points from last night's close. The offshore yuan hit 6.3981, a new high since November 2015.
The central parity rate leapt 232 points to 6.4169, a 25-month record.
Europe's central bank traded out EUR500 million (USD614 million) in dollar reserves to increase its yuan holdings for the first time in June.
The yuan has become a multi-national reserve currency and is held by the European Central Bank, the German Central Bank and others, a market expert said. The most fundamental requirement of a currency is a stable exchange rate, and the yuan can expect to fluctuate between 6.35 and 6.85 this year, he added.
Tightened monetary policy at the ECB is likely to push up the euro exchange rate while the dollar index continues to decline, another expert said, adding that this will cause the yuan to rally against the redback.
For now, the ECB is unlikely to quickly adjust its policy, he continued. The volatility of the foreign exchange market will eventually return to fundamentals, and the yuan exchange rate will likely maintain stable. Market expectations for a consistent yuan value are growing, he said, noting that yuan assets are becoming more appealing to overseas investors.