The value of the Chinese yuan has fallen against the US dollar for six days running, to 6.118 against the dollar, as of Feb 25, for the lowest level over the past six months, with Dai Shugeng, a Xiamen University professor and expert of China International Fair for Investment & Trade (CIFIT), saying that its depreciation was related to the economic situation both in China and abroad, in an interview with China Daily.

First, there was the US quitting its QE and its economy getting better and the foreign-exchange rate of emerging markets increasing; second, the yuan depreciation benefits China's exports and financial risk controls. After the domestic economy maintained stability, the yuan fluctuation stayed normal, with floating well-managed exchange rate. The Central Bank widened the fluctuation range, from 0.5 percent to 1 percent, in April, 2012 and the Central Bank is expected to expand that fluctuation range again in view of its cross-border yuan conference, this past Feb 17 - 18.

Dai explained that the yuan appreciation against the dollar was caused by a favorable balance in capital accounts and current accounts and its depreciation in China caused by inflationary pressures. The State Foreign Exchange Administration showed a current account surplus of 1168.8 billion yuan ($190.75 billion) and a capital account surplus reached 1506.1 billion yuan, along with a trade surplus in January above 200 billion yuan.

Dai told this reporter, "The yuan will continue to appreciate for some time against the dollar because of the double surplus," adding that he guesses the exchange rate will break 6 and keep its bi-directional fluctuation.

By Hu Meidong and Peng Juan from China Daily Fujian Bureau, and Zhao Qian

Edited by Roger Bradshaw