China raised the central parity rate of the yuan by 341 basis points to 6.3154 against the US dollar on Monday (2 November), the largest amount by far on a single day in a decade. The move comes at a time when the country is seeking to promote the yuan as a global reserve currency alongside the dollar, euro and pound at the International Monetary Fund's (IMF) Special Drawing Rights review this month.
The yuan had jumped excessively on Friday by 0.62% even as data showed that manufacturing is still in decline. This prompted the People's Bank Of China (PBOC) to boost yuan's reference rate. PBOC, which now allows the currency to trade up or down 2% from the centrally set daily rate, announced adjustment to the yuan's mid-rate upwards by 0.54%, an increase that was the largest since 2005 according to Bloomberg.