🎈 Up Big Today: Find today's biggest gainers with our free screenerTry Stock Screener

China to lower dollar, euro weightings in CFETS yuan basket index in 2024

Published 12/29/2023, 04:14 AM
Updated 12/29/2023, 04:50 AM
© Reuters. A China yuan note is seen in this illustration photo May 31, 2017.     REUTERS/Thomas White/Illustration/File Photo
EUR/CNY
-
USD/CNY
-

BEIJING (Reuters) -China will adjust the weightings of two key yuan index baskets in 2024, the country's foreign exchange trade platform said on Friday, to better reflect trade patterns.

From Jan. 1, the China Foreign Exchange Trade System (CFETS), which is overseen by the central bank, will lower the U.S. dollar's weighting in the CFETS currency basket to 19.46% from 19.83% and cut the euro's weighting to 18.08% from 18.21%, according to an online statement.

The adjustments will "further enhance the representativeness of the yuan currency basket index," CFETS said in the statement.

China lowered weightings for the dollar and euro in the CFETS basket in 2023.

Such adjustments are unlikely to create sharp volatility in yuan trades, but they may affect the setting of the yuan's official daily midpoint fixing, which caps the spot trade in a narrow range of 2% around that level, market watchers said.

The CFETS index finished the year at 97.42, down 1.27% this year, according to Reuters calculation based on official data. During the same period, the onshore yuan has lost 2.7% to the dollar and looks set for the second straight yearly drop. [CNY/]

China has adjusted the CFETS basket multiple times since it introduced the trade-weighted yuan index in December 2015 to better reflect external trade conditions.

© Reuters. A China yuan note is seen in this illustration photo May 31, 2017.     REUTERS/Thomas White/Illustration/File Photo

In addition, the CFETS said it would also tweak BIS currency basket RMB index after the Bank for International Settlements (BIS) adjusted currency weightings at the start of this year.

In detail, CFETS will remove the Croatian kuna while adding the Bosnian marka, Moroccan dirham, North Macedonian denar, and Serbian dinar to the basket.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.