China News Service, December 30th. The China Foreign Exchange Trading Center announced on the 30th that in order to further enhance the representativeness of the currency basket of the RMB exchange rate index, the China Foreign Exchange Trading Center plans to follow the "CFETS RMB Exchange Rate Index Currency Basket Adjustment Rules" (China Exchange Exchange Announcement [2016] No. 81), adjust the currency basket weights of the CFETS RMB exchange rate index and the SDR currency basket RMB exchange rate index.
The new version of the index will take effect on January 1, 2023.
1. Adjust the weight of the currency basket of the CFETS RMB exchange rate index
The weight of the currency basket of the CFETS RMB exchange rate index is calculated using the trade weight method that considers entrepot trade factors. The current version of the index uses trade data for 2020.
In order to further enhance the representativeness of the index, the new version of the index uses the 2021 trade data as the weight for adjustment.
After historical retrospective calculations, the new version and the current version of the CFETS RMB exchange rate index basically coincide with each other.
2. Keep the BIS currency basket and weights unchanged
The Bank for International Settlements (BIS) has not adjusted the currency basket and weight of the exchange rate index since April 2019, so the CFETS continues to keep the currency basket and weight of the BIS currency basket RMB exchange rate index unchanged.
3. Adjust the currency basket weight of the SDR currency basket RMB exchange rate index
The International Monetary Fund (IMF) adjusted the weight of the SDR currency basket in August 2022, and the CFETS adjusted the currency basket weight of the SDR currency basket RMB exchange rate index accordingly.
(China New Finance and Economics)
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