PBOC sets USD/CNY reference rate at 6.9771 vs. 6.9755 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 6.9771 compared to the previous day's fix of 6.9755 and 6.9521 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.

EUR/USD remains offered near 1.1950

EUR/USD comes under pressure near the 1.1950 zone following the closing bell on Wall Street on Wednesday. The Greenback’s rebound prompted spot to face some correction while investors continue to assess the latest FOMC event. On Thursday, the focus of attention will be on the weekly US labour market data and Factory Orders.

GBP/USD hesitates at four-year highs following lackluster Fed rate hold

GBP/USD churned in place on Tuesday, hitting a brief patch of volatility but otherwise holding steady near four-year highs as the US Dollar struggles to find its footing. The Federal Reserve held interest rates steady, as many investors broadly anticipated, but the Fed’s rate statement and Fed Chair Jerome Powell both failed to give any hints about potential shifts toward future rate cuts, which many investors broadly hoped.

Gold pulls back after testing $5,600 for first time on record

Gold price refreshed record highs near $5,600 before retreating to near $5,525 in Asian trading on Thursday. The bright metal's relentless upsurge has been bolstered by strong safe-haven demand amidst persistent geopolitical tensions, economic uncertainty, and a weaker US Dollar.

Fidelity unveils FIDD stablecoin, set to launch in coming weeks

Fidelity Investments announced that it will launch its first stablecoin, the Fidelity Digital Dollar, making it one of the first large traditional firms in the US to do so. The company will leverage the Ethereum blockchain to roll out the product to retail and institutional investors in the coming weeks, according to a press release on Wednesday.

Federal Reserve pauses, sees economy on firm footing

At its January meeting, the Federal Reserve kept the Fed Funds Target Range (FFTR) unchanged at 3.50%–3.75%, a decision that was fully in line with market expectations.

Bittensor Price Forecast: TAO rallies above $240 as AI tokens rebound

Bittensor reclaims $240 immediate support, reflecting positive sentiment in the broader crypto market. The TAO derivatives market signals retail interest return as futures Open Interest climbs to $163 million.