Key Points
- Yuan’s central parity rate strengthened by 10 pips against the dollar.
- The rate stood at 6.7878 per dollar on Friday.
- The rate is determined from prices offered by market makers.
- The Yuan can trade within a two per cent range of the central parity rate.
Main Story
The central parity rate of the Chinese Yuan strengthened by 10 pips to 6.7878 against the U.S. dollar on Friday, according to the China Foreign Exchange Trade System.
The central parity rate is determined using a weighted average of prices quoted by market makers before the opening of China’s interbank foreign exchange market each business day.
In the country’s spot foreign exchange market, the Yuan is permitted to appreciate or depreciate by up to two per cent from the central parity rate during each trading day.
The Issues
The central parity rate serves as the reference point for daily trading of the Yuan against the dollar in China’s spot foreign exchange market.
What’s Next
The Yuan will continue to trade within the permitted two per cent daily band around the central parity rate.
Bottom Line
The Yuan recorded a marginal strengthening against the dollar on Friday, with its central parity rate rising 10 pips to 6.7878.
