PBOC sets USD/CNY reference rate at 6.7487 vs. 6.7521 previous
On Monday, the People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead at 6.7487 compared to Friday's fix of 6.7521 and 6.6951 Reuters estimate.
On Monday, the People’s Bank of China (PBOC) set the USD/CNY central rate for the trading session ahead at 6.7487, slightly lower than the previous fix of 6.7521. The PBoC's primary objectives are to maintain price stability, including exchange rate stability, and promote economic growth. The bank is accountable to the state of the People’s Republic of China and is not considered autonomous.
The Chairman of the State Council, with approval from the CCP Committee Secretary, holds significant influence over the PBoC's management and direction. Unlike Western economies, the PBoC employs a broader range of monetary policy tools, including the seven-day Reverse Repo Rate, Medium-term Lending Facility, foreign exchange interventions, and Reserve Requirement Ratio.
China’s benchmark interest rate is the Loan Prime Rate, which affects loan and mortgage rates as well as savings interest. By adjusting the Loan Prime Rate, the central bank can influence the Chinese Renminbi's exchange rate. China has 19 private banks, primarily digital lenders such as WeBank and MYbank, which are backed by tech giants Tencent and Ant Group.
In 2014, China permitted domestic lenders with fully capitalized private funds to operate within the state-controlled financial sector.
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