Analysis of the central parity rate of the People's Bank of China

The central parity rate of the People's Bank of China is the most important reference indicator for the spot interbank foreign exchange market and the exchange rate listed by banksEC ForexIt is also a key reference in transactions. Exchange rate central parity calculation method:

Exchange rate median price = (spot buying price + selling price)/2.

The People's Bank of China announces the interbank exchange on the day after the market closes every working dayforeign exchange marketThe closing price of a trading currency such as the US dollar against the RMB serves as the midpoint for the currency to trade against the RMB on the next working day. This mechanism has also received extensive attention in the field of EC foreign exchange.

Since January 4, 2006, the People's Bank of China has authorized the China Foreign Exchange Trading Center to announce the central parity of the exchange rate of RMB against the US dollar, the euro, the Japanese yen and the Hong Kong dollar (the central parity of the People's Bank of China exchange rate) at 9:15 am on each working day, as the central parity of the spot foreign exchange market (including OTC and matching methods) and the exchange rate of bank counter transactions on that day.

The central parity rates of the RMB against the euro, the Japanese yen and the Hong Kong dollar are determined by the China Foreign Exchange Trading Center according to the central parity rate of the RMB against the US dollar on that day and the exchange rates of the euro, the Japanese yen and the Hong Kong dollar against the US dollar in the international foreign exchange market at 9:00 am. EC foreign exchange transaction participants can also refer to this set of calculation logic.

The formation of the central parity rate of the RMB-US dollar exchange rate is as follows: China Foreign Exchange Trading Center inquires all interbank foreign exchange market makers before the opening of the daily interbank foreign exchange market, and uses all market makers' quotations as the calculation sample of the central parity rate of the RMB-US dollar exchange rate. After removing the highest and lowest quotations, the remaining market makers' quotations are weighted and averaged to obtain the central parity of the RMB-US dollar exchange rate on that day. The weight is determined by China Foreign Exchange Trading Center comprehensively according to the quoters' trading volume and quotation conditions in the interbank foreign exchange market. Investors usually regard this central parity as an important weather vane in the EC foreign exchange market.