Beijing: The central parity rate of the Chinese currency renminbi, or the yuan, weakened by 1,008 basis points to 6.3306 against the US dollar on Wednesday, authorities said.

In China’s spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day, reported Xinhua news agency.

The People’s Bank of China, the central bank, improved the exchange rate formation system on August 11 to better reflect market development in the exchange rate of the Chinese yuan against the US dollar.

The central parity rate of the yuan against the US dollar is based on a weighted average of prices offered by market makers and refers to the closing rate of the inter-bank foreign exchange market on the previous day, supply and demand and price movement of major currencies before the opening of the interbank market each business day.