China’s yuan strengthened for the first time in three days after European Union leaders agreed to create a mechanism to contain future debt shocks, helping stem demand for dollars. The People’s Bank of China set the reference rate for yuan trading at 6.6593 per dollar, stronger than yesterday’s 6.6635. International Monetary Fund Managing Director Dominique Strauss- Kahn yesterday called for a gradual yuan appreciation that would allow China’s economy to adjust over time. “The yuan’s recent move is closely related to the dollar’s general fluctuations,” said Lu Zhengwei, an economist at Industrial Bank Co. in Shanghai. The yuan rose 0.12 percent to close at 6.6555 per dollarin Shanghai, according to the China Foreign Exchange Trade System. The currency was little changed on the week. Twelve-month non-deliverable forwards climbed 0.14 percent to 6.5148 per dollar, reflecting bets the currency will strengthen 2.2 percent in one year, according to data compiled by Bloomberg. A sudden yuan move would be “disturbing” to the Chinese and world economy, Strauss-Kahn said in an interview broadcast today on the “Charlie Rose” show on Bloomberg Television. “Those asking for immediate revaluation of the renminbi are in my view probably wrong,” the IMF chief said. The yuan is a denomination of China’s currency, the renminbi. --Judy Chen and Sonja Cheung. Editors: James Regan, Simon Harvey To contact Bloomberg News staff for this story: Judy Chen in Shanghai at +86-21-6104-3043 or xchen45@bloomberg.net; Sonja Cheung in Hong Kong at +852-2977-6934 or scheung58@bloomberg.net To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net.

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