The central parity rate of the Chinese currency, the renminbi or the yuan, weakened 191 basis points to 6.8513 against the U.S. dollar Monday, according to the China Foreign Exchange Trade System (CFETS).
The rate weakened from 6.8322 last Friday and 6.7942 Thursday and was its lowest point since May 31 of last year, CFETS data showed.
The decline came after a central bank adjustment on forward foreign exchange risk reserve requirement ratio, which went into effect Monday.
China's central bank imposed a 20-percent reserve requirement ratio on financial institutions for some forward forex trading on Friday, after the requirement was scraped in September 2017.
The move was aimed at preventing macro financial risks and promoting prudent operation of financial institutions, the People's Bank of China (PBOC) said in a statement.
The move was not capital control or an administrative measure, but part of the macro-prudential policy framework, the PBOC said.
The central bank will make counter-cyclical adjustments based on market conditions to keep forex markets basically stable, the PBOC 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.
The central parity rate of the yuan against the U.S. dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.
