PBOC sets USD/CNY reference rate at 7.0856 vs. 7.0816 previous

Haresh Menghani FXStreet

The People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead on Tuesday at 7.0856 compared to the previous day's fix of 7.0816 and 7.1096 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 holds recovery gains near 1.3400 despite soft UK CPI data

GBP/USD clings to recovery gains near 1.3400 in European trading on Wednesday. The UK annual Consumer Price Index (CPI) inflation cooled to 2.6% in June against the market forecast of 2.7%, failing to deter the British Pound's rebound from weekly troughs. However, the pair's further upside could be limited by ongoing Mideast tensions and sustained US Dollar demand as a haven.

EUR/USD gains ground above 1.1400 on hawkish ECB tone

The EUR/USD pair holds positive ground near 1.1410 during the early European trading hours, bolstered by a hawkish tone from the European Central Bank. However, the potential upside for the major pair might be limited amid escalating military tensions and recent retaliatory airstrikes between the US and Iran.

Gold ease from two-week top as energy-driven inflation fears bolster Fed hike bets

Gold retreats slightly from a two-week high touched earlier this Wednesday, albeit it retains an intraday bullish bias through the first half of the European session. Hopes that US-Iran diplomacy could ease energy prices and temper hawkish US Federal Reserve expectations undermine the US Dollar, which is seen supporting the commodity. In fact, top negotiators for Iran and the US signaled that they have not walked away from talks.

Cardano: Short-term recovery lacks retail support

Cardano price edges lower after the 50-day Exponential Moving Average at $1.770 capped two consecutive days of recovery seen earlier this week. ADA futures point to waning retail traction as Open Interest and trading volume decline amid elevated long liquidations. The technical outlook for ADA is bearish, as momentum remains subdued below a resistance trendline near $0.1782.

Chip stocks are more volatile than Oil

I continue to start the day by looking at these two charts: US crude & Kospi. The former is extending gains, trading above $86 per barrel for WTI and $92 per barrel for Brent, while the Kospi is up more than 4.5%, led higher by Korean chipmakers following a similar jump in VanEck's Semiconductor ETF yesterday.

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.