PBOC sets USD/ CNY reference rate for today at 7.2066 (vs. estimate at 7.3348)

The People’s Bank of China (PBOC), China’s central bank, is responsible for setting the daily midpoint of the yuan (also known as renminbi or RMB). The PBOC follows a managed floating exchange rate system that allows the value of the yuan to fluctuate within a certain range, called a “band,” around a central reference rate, or “midpoint.” It’s currently at +/- 2%.

The rate at 7.2066 is the weakest (for CNY) since September 11, 2023

The previous close was 7.3390

Earlier today I flagged that the PBOC would once again sit on the USD/CNY rate:

• Expectations are for another very heavy dampening of USD/CNY reference rate again today

They seem to be content at a slow burn devaluation rather than a big bang at this stage. China is likely holding the threat of a big bang devaluation as a negotiation tactic.

This article was written by Eamonn Sheridan at www.forexlive.com.