Chinese yuan shows weakening against US dollar on Tuesday
Date
8/27/2024 9:33:02 AM
(MENAFN) On Tuesday, the central parity rate of the Chinese currency, the renminbi (or yuan), experienced a decline of 110 pips, settling at 7.1249 against the U.S. dollar. This adjustment, reported by the China Foreign Exchange Trade System, indicates a weakening of the yuan in its value relative to the dollar. The change reflects ongoing fluctuations in the global foreign exchange market and the impact of various economic factors on the currency.
Within China's spot foreign exchange market, the yuan is subject to a daily fluctuation limit of up to 2 percent in either direction from the central parity rate. This range allows for some degree of movement while ensuring that the currency does not deviate too far from its established baseline, thereby maintaining a level of stability and predictability in currency trading.
The central parity rate itself is determined each business day based on a weighted average of the exchange rates offered by market makers before the interbank market opens. This method ensures that the rate reflects a comprehensive view of market conditions and expectations, as it aggregates input from multiple financial institutions involved in currency trading.
This daily recalibration of the central parity rate plays a crucial role in China’s foreign exchange management, helping to guide the yuan's fluctuations and maintain balance within the currency market. By setting this rate, the authorities aim to manage the currency's value amidst global economic uncertainties and fluctuations, thereby supporting broader financial stability and economic policy objectives.
MENAFN27082024000045015839ID1108606163
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.