The People’s Bank of China decided on Thursday morning to set the exchange rate of the yuan against the US dollar at 7.1740 yuan per dollar, while expectations were for it to be set at 7.2561 yuan. The closing price of the pair in yesterday's session was 7.2580 yuan. The bank also injected 215 billion yuan through repurchase operations in the markets for a duration of 7 days, with a yield 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 uses a fixed exchange rate policy, managing the value of the yuan by keeping it stable against a basket of currencies from countries that are considered partners of China, and the basket is measured against the dollar price (USD) since the United States is the largest trading partner of the People's Republic of China.
