China´s currency, the yuan, rose sharply against the U.S. dollar on Wednesday following overnight huge key interest rate cut in the United States.

The U.S. Federal Reserve slashed the benchmark federal funds rate by 0. 75 percentage point to 3.5 percent, in an emergency attempt to ward off rising fears of U.S. recession.

The rate cut has prompted the U.S. dollar to fall sharply against other major world currencies.

The central parity rate of the yuan, known as Renminbi (RMB), jumped by 206 basis points to 7.2350 yuan to one U.S. dollar, according to China Foreign Exchange Trading System.

The sharp appreciation prompted the RMB to hit the highest after it was revalued with the ending of its peg to the U.S. dollar in July 2005. To date, it has appreciated more than 12 percent against the greenback.

Source: xinhua