Economics Exchange Rate Systems Questions
The managed exchange rate system in China is a system where the value of the Chinese currency, the yuan (CNY), is determined by the People's Bank of China (PBOC) through a combination of market forces and government intervention. The PBOC sets a daily reference rate for the yuan against a basket of currencies, and allows the currency to fluctuate within a narrow band around this reference rate. The government also implements various measures, such as capital controls and intervention in the foreign exchange market, to manage and stabilize the exchange rate.