The central parity rate is a financial term.
The China Foreign Exchange Trade System checks with all market makers in the interbank foreign exchange market every day before the opening of the market, and uses the quotes of all market makers as a sample for the calculation of the central parity.
The quotations of the remaining market makers are weighted by excluding the highest and lowest quotations.
It is the most important reference index for interbank foreign exchange spot trading market and bank listing.
On July 21, 2005, after the implementation of the reform of the formation mechanism, the People’s Bank of China announced the closing prices of USD and other currencies against RMB in the interbank foreign exchange market on the day after the close of each working day, which was used as the central price of currencies against RMB on the next working day.
Since January 4, 2006, the People’s Bank of China has authorized the China Foreign Exchange Trade System to announce the central parity rates of the Renminbi against the US dollar, euro, yen and Chinese currency at 9:15 am each business day. This is the central parity rates in the interbank spot foreign exchange market (including over-the-counter transactions and matching methods) and the exchange rates for the day’s bank over-the-counter transactions.
