BEIJING — Adjustment to close the gap between the central parity rate and the actual trading rate of China’s currency, the renminbi (RMB) or yuan, is basically complete, an official of the People’s Bank of China (PBOC) said on Aug 13 at a press conference.
The value of the yuan has gradually returned to market levels after declines during previous days, and the yuan will remain strong in the long run with no basis for persistent and substantial depreciation, said Zhang Xiaohui, assistant governor of the PBOC.
Zhang said that previously there was a 3-percent gap in the yuan’s value between the rate and market expectations.
The central parity rate of the yuan weakened by 704 basis points, or 1.1 percent, to 6.401 against the U.S. dollar on Aug 13, narrowing from Aug 12’s 1.6 percent and almost 1.9 percent on Aug 11.
On Aug 11, the People’s Bank of China reformed the exchange rate formation mechanism to better reflect market development in the exchange rate of the yuan against the US dollar.