Chinese yuan weakens slightly against US dollar on Monday
Date
6/24/2024 5:41:16 AM
(MENAFN) On Monday, the central parity rate of the Chinese currency renminbi (yuan) against the U.S. dollar was set at 7.1201 by the China Foreign Exchange Trade System (CFETS), marking a slight weakening of 5 pips from the previous rate. This daily reference rate serves as a pivotal benchmark for the yuan's trading range in China's spot foreign exchange market.
China's exchange rate regime allows the yuan to fluctuate within a 2 percent band around the central parity rate established by CFETS each trading day. The determination of this rate is based on a weighted average of prices quoted by market makers in the interbank foreign exchange market prior to the opening of trading.
The adjustment in the central parity rate reflects ongoing market dynamics and considerations of various factors influencing currency valuations. These factors include domestic economic indicators, international trade conditions, geopolitical developments, and global financial market movements that impact the yuan's exchange rate relative to major currencies such as the U.S. dollar.
The CFETS mechanism ensures that the yuan's exchange rate remains responsive to market forces while providing stability and predictability for market participants. This approach aims to foster a balanced and orderly foreign exchange market environment, supporting China's broader economic objectives and facilitating efficient cross-border transactions.
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