(MENAFN) The Chinese currency strengthened against the greenback Tuesday as the official midpoint rate shifted in favor of the renminbi, signaling continued market dynamics in Asia's largest economy.

The central parity rate of the Chinese currency renminbi, known as the yuan, appreciated 21 pips to reach 7.0826 versus the U.S. dollar Tuesday, data released by the China Foreign Exchange Trade System confirmed.

Under existing regulations governing China's spot foreign exchange market, the yuan maintains flexibility within a defined corridor, permitted to fluctuate by 2 percent in either direction from the centrally established parity rate throughout each trading session.

The mechanism for determining the yuan's central parity rate against the U.S. dollar operates through a systematic process: authorities calculate a weighted average derived from price quotations submitted by designated market makers ahead of the interbank market's daily opening bell, ensuring transparency and market-driven pricing in currency valuations.

This modest strengthening comes amid broader discussions about currency stability and trade dynamics between the world's two largest economies, with market participants closely monitoring exchange rate movements for signals about economic policy direction and international commercial relationships.

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