The central parity rate is a key reference point set daily by Chinese authorities to guide currency movements. It reflects a weighted average of prices submitted by market makers before the interbank foreign exchange market opens each business day.
In China’s spot foreign exchange market, the yuan is permitted to fluctuate by up to 2 percent above or below the central parity rate during each trading session. This daily limit is part of the country’s managed floating exchange rate regime, aimed at maintaining stability while allowing some market-driven flexibility.
The modest strengthening of the yuan comes amid ongoing global market volatility and heightened attention on U.S.-China monetary dynamics. Analysts closely monitor changes in the central parity rate as a barometer of economic sentiment and potential policy adjustments by Chinese regulators.
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