Chinese yuan declines by 11 pips against dollar on Thursday
Date
12/12/2024 6:14:13 AM
(MENAFN) The Chinese yuan weakened against the dollar on Thursday, with the People's bank of China (PBOC) setting the reference rate at 7.1854 yuan per dollar, down 11 pips from the previous day's level of 7.1843 yuan. The decline reflects daily fluctuations influenced by the central bank’s policy and market conditions.
According to the official Xinhua news agency, Chinese regulations allow the yuan to rise or fall by up to 2 percent from the central bank's reference rate during each trading day in the spot foreign exchange market. This framework provides a controlled environment for currency fluctuations while maintaining some flexibility.
The reference rate for the yuan against the dollar is determined based on purchase prices submitted by major financial institutions before the daily interbank market opens. This mechanism aims to reflect market dynamics while giving the central bank a degree of influence over exchange rates.
Separately, the PBOC injected 66.1 billion yuan into the banking system on Thursday through its 7-day reverse repurchase mechanism at an interest rate of 1.5 percent. The central bank stated that these measures are designed to ensure sufficient and stable cash liquidity in the banking system. Reverse repurchase, or reverse repo, involves the central bank purchasing securities from commercial banks with an agreement to sell them back at a later date.
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