The People’s Bank of China (PBOC), China’s central bank, is responsible for setting the daily midpoint of the yuan (also known as renminbi or RMB). The PBOC follows a managed floating exchange rate system that allows the value of the yuan to fluctuate within a certain range, called a “band,” around a central reference rate, or “midpoint.” It’s currently at +/- 2%.
The previous close was 7.3151
In open market operations (OMOs), the bank injects 104.5bn yuan in 7 day reverse repos today at an unchanged rate of 1.5%
- 118.9bn mature today
- thus a net drain of 14.4bn yuan
***
Today’s reference rate at 7.2133 continues the trend of the PBOC allowing the yuan (CNY in this case, the onshore yuan) to steadily weaken. This is its weakest setting since September 2023.
This article was written by Eamonn Sheridan at www.forexlive.com.