USD/CNY volatility rise expected after currency basket revamp
Emerging market currencies now make up a higher proportion of the basket used to calculate the renminbi index
Market watchers expect increased volatility in the USD/CNY fixing and spot rate, following the inclusion on January 1 of another 11 currencies to the basket of currencies used by the China Foreign Exchange Trade System (CFETS) to calculate its renminbi index.
The index has been used by the People's Bank of China (PBoC) to set the renminbi's central parity rate since December 2015. As eight of the additional currencies added to the basket emanate from more volatile emerging markets, the daily
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