China’s Yuan Gains Ground Against U.S. Dollar
(MENAFN) China’s currency, the renminbi—widely known as the yuan—saw a significant boost on Thursday, with its central parity rate increasing by 45 pips to close at 7.1063 against the U.S. dollar. This update comes from the China Foreign Exchange Trade System, the official body responsible for setting the daily exchange rate benchmarks.
The yuan’s value in the Chinese spot foreign exchange market is managed within a controlled range, allowing it to fluctuate up to 2 percent above or below the central parity rate each trading day. This mechanism provides a balance between market dynamics and government regulation, aiming to ensure stability amid varying economic conditions.
The central parity rate is established through a weighted average of prices submitted by designated market makers before the start of each business day’s interbank trading session. This approach captures current market sentiment while aligning with China’s broader economic strategies. The daily fixing of the yuan’s exchange rate is pivotal, influencing both domestic and international financial activities, including trade, investment flows, and monetary policy.
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