PBOC sets USD/ CNY reference rate for today at 7.1798 (vs. estimate at 7.3239)

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 7.3130

Yet 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 slow the yuan’s fall.

PBOC injects 508bn in open market operations (OMOs) via 7-day RR, sets rate at 1.80%

  • PBOC injects 105bn in open market operations (OMOs) via 14-day RR, sets rate at 1.95%
  • 169bn yuan of RRs mature today
  • thus a net 440bn yuan injection on the day in OMOs

The injection will be helpful in providing liquidity over the week-long holiday coming up:

China is on holiday from Friday. There will be no reference rate setting tomorrow and all next week.

This article was written by Eamonn Sheridan at www.forexlive.com. Source