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BEIJING, Aug. 11 -- China's central bank will improve its central parity system to better reflect market development in the exchange rate of the Chinese currency renminbi against the U.S. dollar.

Effective on Tuesday, daily central parity quotes reported to the China Foreign Exchange Trade System before the market opens should be based on the closing rate of the inter-bank foreign exchange rate market on the previous day, supply and demand in the market, and price movement of major currencies, the People's Bank of China (PBOC) said.

The PBOC said the RMB's central parity has deviated from its actual market rate by "a large extent and for a long duration," which has "undermined the authority and the benchmark status" of the central parity system.

As the economy of the United States improves, with interest rate hikes highly expected within this year, currencies of emerging economies have generally depreciated against their currency and a strong RMB has created pressure on China's exports, the PBOC said in a separate statement on Tuesday.

Following the change, the central parity rate of the RMB, or the yuan, weakened sharply by 1,136 basis points, or nearly 2 percent, to 6.2298 against the U.S. dollar on Tuesday.