PBOC sets USD/CNY reference rate at 7.1768 vs. 7.1686 previous

People’s Bank of China (PBoC) set the USD/CNY central rate at 7.1768 on Tuesday, versus the previous fix of 7.1686 and market expectations of 7.2648. It's worth noting that the USD/CNY closed near 7.2580 the previous day.

Apart from the USD/CNY fix, the PBoC also unveiled details of its Open Market Operations (OMO) while saying that the Chinese central bank injects 204 billion Yuan via 7-day reverse repos (RRs) at 1.90% vs. prior 1.90%. However, with the 186 billion Yuan of RRs maturing today, there prevails a net injection of around 18 billion Yuan injection on the day in OMO.

Furthermore, the PBoC also unveils the plans to issue 20 billion Chinese Yuan (CNY) worth of 3-month bills and 15 billion worth of 1-year bonds in Hong Kong on August 22.

Also read: PBOC cuts one-year MLF rates to 2.5% from 2.65%

About PBOC fix

China maintains strict control of the yuan’s rate on the mainland.

The onshore yuan (CNY) differs from the offshore one (CNH) in trading restrictions, this last one is not as tightly controlled.

Each morning, the People’s Bank of China (PBOC) sets a so-called daily midpoint fix, based on the yuan’s previous day's closing level and quotations taken from the inter-bank dealer.