(MENAFN) China's currency edged lower against the U.S. dollar Tuesday, with the renminbi's central parity rate declining 18 pips to settle at 7.0885, the China Foreign Exchange Trade System reported.

The modest depreciation reflects ongoing pressure on the yuan amid shifting global currency dynamics and evolving economic conditions in the world's second-largest economy.

Under China's managed exchange rate system, the yuan operates within a controlled trading band in the spot foreign exchange market. The currency is permitted to fluctuate by up to 2 percent in either direction from the central parity rate during each trading session, providing a measure of flexibility while maintaining regulatory oversight.

The central parity rate itself is determined through a sophisticated process before markets open each business day. A weighted average of prices submitted by designated market makers forms the basis for the daily reference rate, which guides trading in the interbank market.

MENAFN04112025000045017169ID1110290414