The People's Bank of China decided on Wednesday morning to set the exchange rate of the yuan against the US dollar at 7.1883 yuan per dollar, while forecasts indicated it would be set at 7.3240 yuan. The closing price of the pair yesterday was 7.3311 yuan. The bank also injected 959 billion yuan through repurchase agreements in the markets for a duration of 7 days, with a yield of 1.5%.
It is worth noting that the People's Bank of China influences the price of the US dollar (USD) by pegging the value of its currency - the yuan - to the US dollar. The bank employs a fixed exchange rate policy by managing the value of the yuan, keeping it stable against a basket of currencies from countries that are considered partners of China. This basket is measured against the US dollar since the United States is China's largest trading partner.
