The yuan's central parity rate against the US dollar yesterday hit a record high for a third consecutive trading day, sparking off another day of volatility for the Chinese currency.

The People's Bank of China set the reference rate at 6.2670 against the dollar yesterday, the highest since the yuan's peg to the greenback ended in 2005.

The yuan fell more than 0.5 percent in intraday trading yesterday, the second time since April 16 when its daily trading band was widened to 1 percent from 0.5 percent to encourage more currency flexibility.

In early trading yesterday it had also strengthened as much as 0.19 percent, the most in two weeks.

The yuan rose 0.05 percent to close at 6.3070 against the dollar, according to the China Foreign Exchange Trade System.

Zhang Yansheng, secretary-general of the Academic Committee at the National Development and Reform Commission, said the looser monetary policies of several major economies around the world have fueled an excessive global liquidity and put a massive arbitrage pressure on the yuan recently.