PBOC fixes Yuan Mid-Point against USD at 6.8171 (est 6.8133)

Ross J Burland FXStreet

People Bank of China fixed the Yuan Mid-Point against the US dollar At 6.8171 (est 6.8133).

China's central bank is also to inject 100 bln yuan via 14-day reverse repos.

Managing China’s complex monetary policy, the PBOC sets a so-called daily midpoint fix, based on the yuan’s previous day closing level and quotations taken from inter-bank dealers.

The fixing restricts the onshore yuan’s daily moves to 2% on either side of it.

If it deviates too far, the PBoC steps in to buy or sell the yuan, putting a lid on its daily volatility.

This exchange rate is known as the onshore yuan, or CNY.

The PBOC, which is heavily influenced by the central government, sets the daily midpoint to provide direction to the market and guide the currency.

The tightly managed onshore yuan has travelled about 1.5% against the dollar so far this month.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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