China has adjusted the CFETS basket several times since it introduced a trade-weighted yuan index in December 2015 to better reflect foreign trade conditions.

Now, according to the country's foreign exchange trading platform, China will adjust, once again, the weights of two key yuan index baskets in 2024, to “better reflect trade patterns”.

According to a corresponding online statement, the China Foreign Exchange Trade System (CFETS), which is overseen by the central bank, will reduce the weight of the U.S. dollar in the CFETS currency basket to 19.46 percent from 19.83 percent and the weight of the euro to 18.08 percent from 18.21 percent from Jan. 1.

The adjustments will "further enhance the representativeness of the yuan currency basket index," CFETS said in a statement.

Such adjustments are unlikely to lead to any big spike of volatility in yuan trading, but they could affect the setting of the official daily average yuan reference rate, which limits spot trading to a narrow 2% range around that level.

The CFETS index ended the year at 97.42, down 1.27% this year. The mainland yuan lost 2.7% against the dollar over the same period and appeared poised for a second straight annual decline.

In addition, CFETS said it will also adjust the BIS yuan currency basket index after the Bank for International Settlements (BIS) adjusted currency weights earlier this year.

Specifically, CFET will remove the Croatian kuna, adding the Bosnian mark, Moroccan dirham, North Macedonian dinar and Serbian dinar to the basket.