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 7.1932
PBOC injects 122bn via 7-day RR, sets rate at an unchanged 1.8%
- 89bn yuan of RRs mature today
- thus a net 33bn yuan injection on the day in OMOs
ps. Lunar New Year holidays in China are:
- February 10 to February 17 (eight days in total)
- employers are encouraged to arrange paid leave for employees on New Year’s Eve, February 9
The People’s Bank of China will provide added liquidity ahead of February 9 via multiple tools including OMOs to meet increased demand for cash leading into and right over the Lunar New Year holiday period.
This article was written by Eamonn Sheridan at www.forexlive.com. Source