BEIJING, Jan. 17 (Xinhua) -- The value of the Renminbi (RMB) yuan against the U.S. dollar hit a new high for the third straight day on Wednesday with a central parity rate of 7.7798 yuan to the dollar, according to the Chinese Foreign Exchange Trade System.

    The central parity rate was 7.7938 yuan on Monday and 7.7895 yuan on Tuesday.

    Wednesday's exchange rate also marked a new high of 0.99698 yuan to the Hong Kong dollar.

    The value of the Renminbi (RMB) yuan overtook the HK dollar on Monday for the first time, with a central parity rate of 0.99945 yuan to one HK dollar. The central parity rate was 0.99886 yuan on Tuesday.

    The central parity rate against the euro hit a new high of 10.054 yuan and the central parity rate against the British Pound was also a record at 15.2575 yuan.

    Insiders have ascribed the continuous appreciation of the RMB to China's growing trade surplus and foreign exchange reserves.

    The country's trade surplus last year soared 74 percent to a record 177.47 billion U.S. dollars.

    China's foreign exchange reserve reached 1.0663 trillion U.S. dollars at the end of 2006, announced the People's Bank of China on Monday.

    The figure rose 30.22 percent over the end of 2005, exceeding one trillion U.S. dollars for the first time, according to the central bank.

    The RMB has risen by more than 4.1 percent since China's reform of the exchange rate system in July 2005, which allowed the yuan to float against the U.S. dollar within a daily 0.3 percent band from the official central parity rate.

    The State Information Center has predicted an appreciation of three to four percent this year, given the country's trade surplus and foreign exchange reserves are set to go on rising.

    China's excessive trade surplus was detrimental to both domestic economic development and foreign trade relations, Minister of Commerce Bo Xilai said in Beijing on Monday.

    He said that reducing trade surplus was the "top priority" of the year's foreign trade development.

    Bo said that as China's economic growth was mainly powered by exports, the government would keep a close eye on the negative impact of surplus reduction on national economic growth, especially job losses.

    "To minimize the bad impact, effective measures must be taken to expand domestic consumption," he said.

    The fast appreciation of the RMB might prompt an influx of speculative funds and cause over supply of liquidity, which could easily lead to heated housing and stock markets, warned Xu Shaoqiang, vice president of Economics College of Shanghai-based Fudan University.