PBOC sets USD/CNY reference rate at 6.8582 vs. 6.8593 previous

Haresh Menghani FXStreet

On Wednesday, the People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead at 6.8582 compared to the previous day's fix of 6.8593 and 6.8096 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 clings to small gains near 1.3450 after UK jobs data

GBP/USD trades in positive territory at around 1.3450 in the European session on Tuesday. The UK ILO Unemployment Rate remained at 4.9% in the three months to May, compared with expectations of 5%, but failed to provide any impetus to the British Pound's renewed uptick. Traders stay cautious amid US-Iran uncertainty and the UK political transition.

EUR/USD keeps range above 1.1400 after German ZEW

EUR/USD is keeping its range above 1.1400 in Tuesday's European session, as the US Dollar (USD) retreats following Monday's rebound. Nevertheless, the uncertainty around the US-Iran conflict limits the pair's upside. Meanwhile, the Euro (EUR) pays little heed to the strong German sentiment data, as traders await Thursday's European Central Bank policy announcements, which could drive the Euro's near-term valuation.

Gold extends recovery toward $4,100

Gold gains traction following Monday's choppy action and advances toward $4,100 on Tuesday. However, the uncertainty surrounding the conflict in the Middle East and growing expectations for a hawkish Federal Reserve policy outlook could make it difficult for the precious metal to gather bullish momentum in the near term.

Bitcoin extends advance as ETF inflows, Iran war mediators' proposal lift risk mood

Bitcoin extends its gains, trading above $65,800 after closing above the key technical hurdle the previous day. The bullish price action is further supported by the return of institutional demand, with spot Exchange Traded Funds continuing their inflows on Monday. In addition, the renewed hopes for peace between the US and Iran have lifted risk sentiment, providing an additional tailwind for the Crypto King.

Buy the dip on the Dow Jones and S&P? Forex Trading Gold descending triangle

Trading during a war, a pandemic, during trade disputes, and other geopolitical events, especially when some major players are sociopathic, can be quite challenging. The Iran war is no exception. The Iran war is no exception.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.