Chinese yuan shows slight depreciation against US dollar on Tuesday
Date
5/14/2024 5:48:36 AM
(MENAFN) On Tuesday, the Chinese currency renminbi, commonly referred to as the yuan, saw a slight depreciation against the U.S. dollar, as the central parity rate weakened by 23 pips to 7.1053, according to the China Foreign Exchange Trade System (CFETS). This adjustment reflects the ongoing fluctuations in the exchange rate between the yuan and the U.S. dollar within China's foreign exchange market.
In China's spot foreign exchange market, the yuan is subject to a daily trading band, allowing it to fluctuate within a range of 2 percent from the central parity rate established by the CFETS. This mechanism aims to provide a degree of flexibility while also preventing excessive volatility in the exchange rate.
The central parity rate of the yuan against the U.S. dollar is determined based on a weighted average of prices offered by market makers prior to the opening of the interbank market each business day. This rate serves as a reference point for trading activities in the foreign exchange market, influencing the direction of currency movements and facilitating price discovery.
Overall, the adjustment in the central parity rate reflects the dynamic nature of currency markets and the factors influencing the exchange rate between the yuan and the U.S. dollar, including economic indicators, monetary policy decisions, and external market conditions.
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