China Considers Changing Yuan Fixing Formula to Curb Swings
- Change seen smoothing volatility and reducing role of markets
- Fixing has recently been stronger than analysts estimated
PBOC Said to Plan Change in Yuan Fixing Formula
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China is considering changes to the way it calculates the yuan’s daily reference rate against the dollar, a move that’s likely to reduce exchange-rate volatility while undermining efforts to increase the role of market forces in Asia’s largest economy.
Policy makers may add a “counter-cyclical factor” to the yuan’s daily fixing, according to a government statement on Friday, which confirmed an earlier report by Bloomberg News. Analysts said the change would give authorities more control over the fixing and restrain the influence of market pricing.