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 7.1655
7.1406 is the strongest reference rate for CNY since August 7 and the first time the CNY mid-rate is stronger than than the estimate since July.
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PBOC injects 319bn via 7-day RR, sets rate at an unchanged 1.8%
- 434bn yuan of RRs mature today
- thus a net 115bn yuan drain on the day in Open Market Operations (OMOs)