PBOC has informed local banks about changing daily fix - BBH
|Analysts at BBH note that reports suggest that the PBOC has informed local banks that it is changing the way it sets the daily fix and says it will add a "counter-cyclical factor."
Key Quotes
“It is not exactly clear what this means. There are a couple of possibilities. It could be an explicit way to dilute market forces. This seems unlikely. Why make it explicit? An alternative explanation is that it will formalize what is already taking place. The fix is a bit of a black box, and participants have long recognized a subjective element. The process of defining it also would seem to limit it.”
“The yuan initially built on yesterday's gains. According to Bloomberg, the dollar fell to CNY6.8465, its weakest level since January. It recovered late back to CNY6.8640. The greenback has slipped against the redback for the third consecutive week, the longest streak in four months.”
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