Yuan-dollar exchange rate updated its six-year low

Almaty. October 28. Silkroadnews – The People’s Bank of China (Central bank) lowered the rate for national currency renminbi (the official name of the yuan) against the dollar by 0.18% (122 basis points) to 6.7858 for $1, which became a new six-year minimum, Chinese media reported.

Earlier in October 2016 the yuan updated six-year low few times. The analysts of China’s State Administration of Foreign Exchange’s previously noted that the major reasons behind the national currency weakling are the U.S. dollar strengthening and reforms raising the role of market forces in determining the exchange rate.

The reform of the RMB exchange rate formation mechanism against the dollar began last August. Chinese regulator announced its decision “to optimize the calculating methodology” for the exchange rate toward raising the role of market forces in view of China’s foreign trade positive balance and strong position of the yuan against the currencies of other countries.

Fluctuations in the exchange rate regarding the official parity rate set by the People’s Bank must not exceed 2%.