China’s Yuan Edges Down Against U.S. Dollar
(MENAFN) The China Foreign Exchange Trade System (CFETS) announced Thursday that the central parity rate of the Chinese currency, the renminbi (yuan), weakened by 21 pips to 7.0864 against the U.S. dollar, signaling continued market pressure on the currency amid global economic fluctuations.
In China’s managed foreign exchange regime, the yuan is permitted to fluctuate by up to 2 percent above or below the central parity rate each trading day. This system is designed to maintain market stability while allowing gradual adjustments in response to economic indicators and international monetary trends.
The daily central parity rate is determined based on a weighted average of quotes provided by designated market makers before the opening of the interbank foreign exchange market. Analysts say this mechanism reflects both market forces and regulatory oversight, serving as a key tool for the People’s Bank of China (PBOC) to guide the yuan’s value.
Market observers will be closely watching whether the latest adjustment signals a broader policy shift or reflects short-term market dynamics, as China continues to balance exchange-rate flexibility with financial stability.
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