PBOC sets USD/CNY reference rate at 6.8487 vs. 6.8562 previous

Haresh Menghani FXStreet

The People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead on Thursday at 6.8487 compared to the previous day's fix of 6.8562 and 6.8087 Reuters estimate.

PBOC FAQs

What does the People's Bank of China do?

The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market.

Who owns the PBoC?

The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts.

What are the main policy tools used by the PBoC?

Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi.

Are private banks allowed in China?

Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

GBP/USD hovers around 1.3450 amid upbeat mood, ahead of ADP

GBP/USD is inching higher above 1.3450 in European trading on Wednesday, helped by reduced haven appeal for the US Dollar as markets cheer a potential US-Iran deal on the Strait of Hormuz reopening. The decision is due later in the day. Traders also look forward to the US ADP and ISM Services PMI data.

EUR/USD keeps range near 1.1550 on Hormuz reopening optimism

EUR/USD holds ground near 1.1550 in the early European hours on Wednesday. The pair stays supported amid hopes for a US-Iran deal on the reopening of the Strait of Hormuz, which lifts risk sentiment and keeps the safe-haven US Dollar on the back foot. The US ADP Employment data and ISM Services PMI report are in the spotlight alongside Mideast headlines.

USD/INR: Indian Rupee eases from monthly highs after RBI's neutral hold

Indian Rupee is easing from its highest level in a month above the 95.00 level against the US Dollar on Wednesday, holding gains after the Reserve Bank of India (RBI) held the Repo Rate at 5.25%, as expected, maintaining a neutral stance amid still-modest inflation.

Top 3 Price Predictions: Bitcoin, Ethereum, Ripple – BTC eyes breakout, ETH consolidates, XRP finds stability

Bitcoin, Ethereum and Ripple move toward the key technical levels on Wednesday, which could determine the next directional bias. BTC is near the 50-day Exponential Moving Average, ETH trades sideways while XRP is showing signs of stabilization.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.