Group 1: CFETS Index Overview - The CFETS RMB Exchange Rate Index is a nominal basket currency index based on trade shares, using geometric averaging of the RMB against a basket of currencies[2] - The currency basket is adjusted annually based on trade data from two years prior, with the new weights effective from January 1, 2026, based on 2024 trade data[3] Group 2: Weight Adjustments and Trends - The new weights for 2026 align closely with the 2024 trade shares, with the USD weight at 18.31% and the EUR weight at 17.86%, both exceeding their respective trade share benchmarks by 1.07 and 1.69 percentage points[4] - The concentration of the top five currencies (USD, EUR, JPY, KRW, AUD) has declined for four consecutive years, reaching 58.15% in 2026, down from 66.03% in 2020, averaging a decline of 1.31 percentage points per year[4][19] - The weight of developed market currencies has decreased from 76.97% in 2020 to 69.56% in 2026, while emerging market currencies have increased from 23.03% to 30.44%[5][26] Group 3: Currency Weight Changes - The USD weight has dropped from 19.88% in 2022 to 18.31% in 2026, with an average annual reduction of approximately 0.51 percentage points from 2024 to 2026[5][30] - Among emerging market currencies, ASEAN, Middle Eastern, and Russian currencies have the highest weights, collectively accounting for 19.29% of the emerging market currency weight in 2026[6][32] Group 4: Future Implications - The trade share data from 2025 will guide the currency weight adjustments for 2027, indicating a potential continued decline in the concentration of the top five currencies[7] - The influence coefficient of the USD index on the USDCNY midpoint has decreased from 0.337 to 0.331, indicating reduced depreciation pressure on the RMB against the USD[8][47]

Core Viewpoint - The CFETS RMB Exchange Rate Index is undergoing its annual weight adjustment to enhance the representativeness of the currency basket, effective from January 1, 2026 [1][2] Group 1: CFETS RMB Exchange Rate Index Adjustments - The weight of the US dollar in the new CFETS currency basket is reduced from 0.18903 to 0.183067910333, while the euro's weight decreases from 0.17902 to 0.178618845848 [1] - The South Korean won replaces the Japanese yen as the third-largest currency in the basket, with the new weight for the won being 0.084557506297 and for the yen being 0.081182351858 [1] - The Australian dollar's weight is decreased from 0.05947 to 0.054093213303, while the weights for the Malaysian ringgit and the Russian ruble have increased compared to 2024 [1] Group 2: BIS Currency Basket Adjustments - The CFETS RMB Exchange Rate Index's currency weights are calculated using trade-weighted methods that consider re-export trade factors, with the current version based on 2023 trade data [2] - The new index will utilize 2024 trade data for weight adjustments, and historical simulations indicate that the trends of the new and current indices are largely consistent [2] - The BIS currency basket will remove the Bulgarian lev due to Bulgaria's entry into the Eurozone in 2026, and the corresponding weight will be added to the euro [2]

Group 1 - The announcement from the China Foreign Exchange Trading Center details adjustments to the CFETS RMB exchange rate index and the BIS currency basket RMB exchange rate index, including changes in currency weights [1] - The new CFETS currency basket assigns a weight of 0.18307 to the US dollar [1] - The updated BIS currency basket will remove the Bulgarian lev and increase the weight of the euro accordingly [1] Group 2 - The trading center will maintain the currency basket and weights for the SDR currency basket RMB exchange rate index unchanged [1]