On Wednesday morning, the People's Bank of China decided to set the exchange rate of the yuan against the US dollar at 7.1887 yuan per dollar, while forecasts indicated it would be set at 7.3435 yuan. The closing price of the pair in yesterday's session was 7.3284 yuan. The bank also injected 1.1 billion yuan into the markets through 7-day repurchase operations, with a yield of 1.5%.
It is noteworthy that the People's Bank of China influences the price of the US dollar by pegging the value of its currency - the yuan - to the dollar, as the bank employs a fixed exchange rate policy, which differs from the free-floating exchange rate used by the United States and many other countries, allowing for a narrow range of movement for China's currency.
The People's Bank of China manages the value of the yuan by keeping it stable against a basket of currencies from countries considered partners to China, with the basket being measured against the US dollar since the United States is China's largest trading partner.
