FXstreet.com (London) - China is the worlds fastest growing economy, with huge currency reserves and a nearly insatiable need for commodities, yet you never much about their currency, the Chinese Yuan.

Yuan has been pegged by the Chinese government in a play to help spur continued stable growth in the Chinese economy.By holding the Yuan at close to 6.83, after it rose over 20% in three years, helps exports but makes commodities expensive for the nation. While combating inflation and maintaining stability in the economy are crucial, China will eventually have to move towards free float of the currency and shift away from its dependency on exports.

By pegging the currency and thus caging Yuan strength, this means Yuan's current levels are far from 'true', that is to say the Yuan trades at an undervalued level.

Yuan can still move and be traded within a range however, as the currency trades on the interbank market on a 0.5 percent band around the parity rate for that day. Yuan currently trades at 6.8269/83.

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