China's central bank has made a change to the regime used tomanage the yuan, effectively removing a component used by banks tocalculate their submissions to the currency's daily reference rate,according to people familiar with the matter.

The People's Bank of China recently told some lenders thatcontribute to the rate—known as the fixing—to adjust their use ofthe “countercyclical factor” in such a way that it would have noimpact on the mechanism, said the people, who asked not to beidentified as the details are private. They said the change hasalready taken effect.

The yuan, which headed for its biggest drop in two months on thenews, is allowed to move a maximum of 2% either side of the fixing.Analysts said the change shows China is confident in the yuan'scurrent trajectory, which has been one of steady appreciation.

Continue Reading for Free

Register and gain access to:

  • Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
  • Informative weekly newsletter featuring news, analysis, real-world cas studies, and other critical content
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.