The conversion rate from RMB into USD was about 8.25:1 and pegged to the U.S. dollar on a 1:1 basis.
To illustrate, assume the USD was converted into Euros at, say, 1 USD = 1 EUR. In this case 1 EUR could be exchanged for 8.25 Yuan. Now assume that the dollar loses one half of its purchasing power against the Euro. In the case, the collar would be converted at 2 USD = 1 EUR. Similarly, because it is pegged with the dollar, the RMB would be lose half of its purchasing power against the Euro and be exchanged at the rate of 16.5 Yuan = 1 EUR.
Huh - seems like a lot of extra complexity to me. It was pegged at 8.25:1, now it’s pegged around 6.46:1. Rather than adjusting a secondary conversion ratio to create a 1:1, why not just state what the conversion is? I’ve never seen the conversion rate - floating or pegged (which includes HKD and a few other currencies that are pegged or limited to a small float range).