On Thursday morning, the People's Bank of China decided to set the exchange rate of the yuan against the US dollar at 7.1881 yuan per dollar, while forecasts indicated it would be set at 7.3247 yuan. The closing price of the pair during yesterday's session was 7.3319 yuan. The bank also injected 340 billion yuan into the markets through 7-day repurchase operations at an interest rate of 1.5%.
It is noteworthy 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 dollar. The bank employs a fixed exchange rate policy by managing the yuan’s value to keep it stable against a basket of currencies of countries that are considered partners of China, with the basket measured against the dollar since the United States is China's largest trading partner.
