BEIJING -- The central parity rate of yuan, the Chinese currency, rose to a fresh high Tuesday, according to the China Foreign Exchange Trading System.

The Chinese currency rose 31 basis points to 6.586 against the US dollar Tuesday, breaking the previous record high of 6.5876 set on January 27, 2011.

The yuan appreciated 3.6 percent last year, but accelerating inflation has led some analysts to predict it could rise further against the dollar this year as the People's Bank of China (PBOC), the central bank, attempts to cool price pressures.

The PBOC announced in June 2010 it would further reform the exchange rate formation mechanism to improve its flexibility.

On China's foreign exchange spot market, the yuan can rise or fall 0.5 percent from the central parity rate each trading day.

The central parity rate of the RMB against the US dollar is based on a weighted average of prices before the opening of the market each business day.