I posted this earlier as some background to today's mid-rate setting:
- Ahead of the yuan rate setting from the PBoC, a reminder of the move to limit its downside
- USD/CNY is the onshore yuan. Its permitted to trade plus or minus 2% from this daily reference rate.
- CNH is the offshore yuan. USD /CNH has no restrictions on its trading range.
- A significantly stronger or weaker rate than expected is typically considered a signal from the PBOC.
- The previous close was 6.9330
- The reference rate is a good way from that estimate, the PBOC trying to slow the devaluation of the yuan. This is ten consecutive days now the Bank has held the CNY stronger than the estimate.
6.9096 is the weakest for CNY (i.e. highest for USD/CNY) at the mid-rate setting since August 25 of 2020.
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The PBOC injects 2 yuan via 7-day reverse repos (rate remains at
2.0%)
2bn yuan mature today
thus a net neutral in OMOs today
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