The PBoC adjusted the renminbi (or yuan) fixing mechanism for the second time on 20 February. The first time was in August 2015 when it changed the calculation from using a 10-day moving average of the CNY-USD’s closing rates to using the CNY-USD’s closing rate of the previous trading day.
There are three parts to the renminbi fixing:
1. The CNY-USD’s spot closing rate as of 4:30pm of the previous trading day.
2. The average of the 24-hour daily changes in the USD against the currencies in the CFETS basket, the BIS CNY basket and the IMF SDR basket.
3. A PBoC discretionary adjustment based on its judgement on the FX market’s demand and supply conditions, risk appetite and international developments.
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