Chinese Yuan weakens to 6.3996 against USD, Wednesday

…China adopts law on futures, derivatives

The central parity rate of the Chinese currency renminbi, or the yuan, weakened 276 pips to 6.3996 against the U.S. Dollar on Wednesday, according to the China Foreign Exchange Trade System.

In China’s spot foreign exchange market, the yuan is allowed to rise or fall by two per cent from the central parity rate each trading day.

The central parity rate of the yuan against the U.S. D is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.

Chinese lawmakers on Wednesday,  voted to adopt a law on futures and derivatives to better protect investors’ interests and develop the futures market in favor of the real economy.

The law, to take effect on Aug. 1, was approved at a session of the Standing Committee of the National People’s Congress, China’s top legislature.

Li Zhengqiang, researcher at the University of International Business and Economics, said that China’s financial derivatives market, one of the largest in the world, requires a law specifically made for its regulation.

China’s futures market posted record-setting trading volume and turnover in 2021, which stood at 581.2 trillion yuan (about 90.8 trillion U.S. dollars) and over 7.5 billion lots, respectively, data from the China Futures Association showed.