PBOC sets USD/CNY reference rate at 7.1007 vs. 7.1048 previous

Haresh Menghani FXStreet

On Monday, the People’s Bank of China (PBOC) set the USD/CNY central rate for the trading session ahead at 7.1007 compared to Friday's fix of 7.1048 and 7.1210 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 stays firm above 1.1800 amid USD retreat

EUR/USD rebounds after two days of losses, holding above 1.1800 in European trading on Tuesday. The pair benefits from a broad US Dollar retreat as markets weigh the partial government shutdown-led economic data disruption against the geopoltical de-escalation.

GBP/USD retakes 1.3700 as fresh buying emerges

GBP/USD is advancing in the European session on Tuesday, re-attempting the 1.3700 mark. The Pound Sterling rebounds against the US Dollar amid improved market mood and a repositioning ahead of the Bank of England's first policy decision of 2026.

Gold recovers further from four-week low; retakes $4,900 amid a softer USD

Gold recovers further from its lowest level since January 6, touched the previous day, and retakes the $4,900 mark during the early European session on Tuesday. The US Dollar edges lower and moves away from an over one-week high, and assists the commodity to regain positive traction following a steep decline over the past two days.

Zilliqa rallies over 20% ahead of Cancun EVM upgrade

Zilliqa price is extending its gains, rallying over 20% to $0.006 on Tuesday after soaring nearly 34% the previous day. The upcoming Cancun upgrade this week is boosting investor sentiment, despite broader weakness in the crypto market. ZIL continues to attract strong buying interest, supported by rising trading activity and improving derivatives metrics.

Macro outlook improves despite the geopolitics

In the headlines, geopolitical have overshadowed an otherwise benign macro environment in early 2026. While market jitters around the US intervention in Venezuela and the sudden tariff threats over the control of Greenland faded quickly, the events have left a sense of unease of what might come next.

Zilliqa Price Forecast: ZIL rallies over 20% ahead of Cancun EVM upgrade

Zilliqa (ZIL) price is extending its gains, rallying over 20% to $0.006 on Tuesday after soaring nearly 34% the previous day. The upcoming Cancun upgrade this week is boosting investor sentiment, despite broader weakness in the crypto market.