I want to know the function of the central parity of foreign currency exchange rate.
Middle price: refers to the compromise between the foreign exchange prices bought and sold by banks, usually the price used by banks when clearing funds. That is, the middle price of foreign exchange for individuals or units to buy and sell foreign exchange. China Foreign Exchange Trading Center makes an inquiry to all market makers in the inter-bank foreign exchange market before the daily opening of the inter-bank foreign exchange market, and takes all market makers' quotations as calculation samples of the central parity of RMB against the US dollar. After excluding the highest quotation and the lowest quotation, the remaining market makers' quotations are weighted and averaged to get the central parity of RMB against the US dollar on that day, and the weight is determined by China Foreign Exchange Trading Center according to the trading volume and quotations of the quotations in the inter-bank foreign exchange market.