Yuan Nudges Up Against U.S. Dollar
(MENAFN) The Chinese currency renminbi, commonly known as the yuan, appreciated slightly against the U.S. dollar on Wednesday, with the central parity rate strengthening by 14 pips to 7.1013, according to data released by the China Foreign Exchange Trade System (CFETS).
The central parity rate is set each business day by China's central bank and acts as the official reference point for trading the yuan in the domestic foreign exchange market. It is calculated as a weighted average of prices submitted by designated market makers prior to the opening of the interbank market.
Under China’s managed floating exchange rate regime, the yuan is allowed to fluctuate by up to 2 percent above or below this central parity rate on any given trading day. This mechanism provides a balance between market forces and regulatory oversight, allowing for a degree of flexibility while maintaining currency stability.
Wednesday’s modest strengthening comes amid ongoing monitoring of global economic conditions and foreign exchange market dynamics. The daily adjustment of the yuan’s central parity rate is closely watched by traders and analysts for signs of China’s monetary policy intentions and broader economic trends.
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