China's official foreign exchange trading platform operator fine tuned the yuan midpoint mechanism on Monday, three sources with direct knowledge of the matter said, the latest move to help curb speculation on the exchange rate.
China Foreign Exchange Trade System (CFETS) shortened the reference period of yuan trading against its trade-weighted basket to 15 hours, between 4:30 p.m (0830 GMT) from the previous trading day to 7:30 a.m, compared with the previous 24 hours, banking sources said on the condition of anonymity.
They said the latest adjustment was meant to better reflect changes in the forex market, and help curb intraday speculative trading activities.
The FX trading platform operator declined to comment on the matter when contacted by Reuters.
The central bank, which oversees the FX trading platform operator, has been trying to reform the way it manages the yuan by making it more market-driven and transparent.
On Dec. 29, the CFETS changed the composition of the CFETS basket that is used to set the yuan's daily value. Starting from the beginning of this year, the number of currencies in the basket was increased to 24 from 13.
On a daily basis, the People's Bank of China sets the yuan's midpoint to the U.S. dollar based on the previous day's 4:30 p.m closing price, while also taking into account changes in its trade-weighted basket.
On Monday, the PBOC set the midpoint rate at 6.8743 per dollar prior to the market open, weaker than the previous fix at 6.8456. The spot yuan was largely flat against the dollar, changing hands at 6.8692 as of 0613 GMT.
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