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 7.1485
The Bank successfully held USD/CNY from gaining much above 7.3+ it was trading at for weeks. And are still sitting on it (ps. the chart not updated for today’s trading so far – the market opens soon):
PBOC injects 664bn via 7-day RR, sets rate at an unchanged 1.8%
- 352bn yuan of RRs mature today
- thus a net 312bn yuan injection on the day in Open Market Operations (OMOs)