(Yicai Global) March 21 -- The People's Bank of China strengthened the yuan by 251 basis points against the dollar this morning, fixing the central parity rate at 6.6850 as dovish signals from the Federal Open Market Committee led to a decline in the US Dollar Index.

The China Foreign Exchange Trade System, the central bank's interbank trading and foreign exchange division, set the rate 148 points lower than yesterday's market-based closing price of 6.6998. A lower rate means a stronger yuan.

The CFETS sets the benchmark on the morning of each business day. Spot rates may deviate 2 percent above or below the figure.

The US Dollar Index, the weighted mean of the greenback's value against six other major currencies, had fallen to 95.85 as of 9.43 a.m. Beijing time today.

That marks its lowest value since early February after the FOMC decided following a two-day meeting to maintain the current benchmark interest rate of between 2.25 percent and 2.5 and to avoid any hikes the rest of the year.

Editor: James Boynton