The People’s Bank of China set the onshore yuan (CNY) reference rate for the trading session ahead.
- USD/CNY is the onshore yuan. Its permitted to trade plus or minus 2% from this daily reference rate.
- CNH is the offshore yuan. USD /CNH has no restrictions on its trading range.
- A significantly stronger or weaker rate than expected is typically considered a signal from the PBOC.
The previous close was 7.3125
Another massive divergence between the modelled estimate and the actual. The daily reference rate seems to be stuck on the 7.17 big figure – the People’s Bank of China is determined to hold the yuan from falling further. Today’s mid-rate is the strongest for the CNY since August 14.
ps. China goes on holiday on Friday and isn’t back until October 9.
ps. News crossing that the PBoC says it’ll step up policy coordination, will implement monetary policy in a precise and forceful manner.
more to come
PBOC injects 200bn in open market operations (OMOs) via 7-day RR, sets rate at 1.80%
PBOC injects 417bn in open market operations (OMOs) via 14-day RR, sets rate at 1.95%
- 205bn yuan of RRs mature today
- thus a net 412bn yuan injection on the day in OMOs
The 14-dayers will be helpful providing liquidity over the week-long holiday coming up:
This article was written by Eamonn Sheridan at www.forexlive.com. Source