BEIJING, March 21 -- The yuan yesterday rose to its highest level since a peg to the U.S. dollar was scrapped last July, as two U.S. senators prepare to visit Beijing to seek a stronger currency.

    Senators Lindsey Graham and Charles Schumer, who say a weak yuan has contributed to a record U.S. trade deficit, are seeking sanctions on Chinese imports unless the currency is allowed to gain value more rapidly.

    The yuan, which has risen about 1 percent since a 2.1 percent revaluation July 21 last year, accelerated its gains last week after Premier Wen Jiabao said the market will play a greater role in setting exchange rates.

    "The focus is going to be on the senators' visit," said Irene Cheung, a Singapore-based currency strategist at ABN Amro Bank NV.

    The yuan climbed 0.09 percent to 8.0242 against the U.S. dollar in Shanghai.

    On March 15, the yuan rose 0.12 percent, the biggest leap since the revaluation, when China said it would let the currency move as much as 0.3 percent against the dollar each day.

    The government is doing its best to move toward a freely traded currency, Wu Xiaoling, vice governor of the People's Bank of China, told reporters in Beijing on Saturday, appealing for understanding from the visiting U.S. senators.

    "They should understand that China is doing its best," Wu said. "China's economic restructuring needs a process."

    Graham, a Republican from South Carolina, and Schumer, a Democrat from New York, will meet Chinese officials in Beijing from today to Thursday, in Shanghai from Thursday to Friday and in Hong Kong on Friday. What they learn on the trip will determine whether they proceed with a vote on their bill that would apply 27.5 percent tariffs on Chinese imports.

    A semiannual report from the U.S. Treasury due in April may accuse China of manipulating its currency.

    The central bank said Feb. 21 it aims to deepen reform of the foreign-exchange system as local companies have "adapted" to last year's currency changes.

(Source: Shenzhen Daily/Agencies)