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The following data and figure are provided: Table 1 : USD/CNY Exchange Rate Date USD/CNY Parity rate Closing rate (one day before) Implied dollar index

The following data and figure are provided:

Table 1: USD/CNY Exchange Rate

Date

USD/CNY Parity rate

Closing rate (one day before)

Implied dollar index

26 Mar 2021

6.5376

6.5463

25 Mar 2021

6.5282

6.5245

100

Suppose the USD/CNY rate is determined rigorously following the two pillar exchange rate policy, use the information of parity rate and closing rate (one day before) to back out the implied dollar index, and fill in your answer in the Table 1. You only need to provide the numbers for 26 Mar 2021.

Here is the two pillar policy, with wUSD= 0.2159

log(S-CP-t+1/S-CP-t)=0.5log(StCL/StCP)+0.5(1-wUSD)*log(Xt+1/Xt)

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