The People’s Bank of China (PBOC) set its official yuan midpoint on Tuesday at a more than two-year high of 6.4372 per dollar. Thus, the official midpoint was by 202 pips, or 0.31%, higher than the previous fix of 6.4574 on Monday and was the strongest since December 11, 2015.
The yuan also received a boost from the German central bank’s decision to include the Chinese yuan in its currency reserves.
Earlier, the PBOC made a change to the regime used to manage the yuan. The central bank told some lenders that contribute to the rate to adjust the use of the “counter-cyclical factor” in such a way that it would have no impact on the mechanism known as the fixing.
The regulator introduced the factor last year in a bid to reduce volatility in the yuan. As a result, the Chinese currency strengthened last year for the first time in four years.
