China's New Yuan Index: Here's What the Market Needs to Know
- The what, why and how of the PBOC's latest currency move
- Central bank seen setting the stage for further depreciation
China Intends to Loosen Yuan's Peg to Dollar: WSJ
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A new currency index in China is causing a stir as policy makers seek to refocus the market’s attention away from the yuan’s moves versus the dollar and instead compare performance against a wider selection of peers.
The CFETS RMB Index was unveiled late on Friday and the People’s Bank of China said yuan fluctuations mustn’t be measured in terms of the greenback alone, adding that exchange rates are a reflection of trade and investment with multiple countries. The new measure monitors moves against a basket of trading partners’ currencies and was introduced by China Foreign Exchange Trade System, an arm of the PBOC that facilitates interbank trading.