The People's Bank of China set the onshore yuan (CNY) reference rate for the trading session ahead.
- 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 regular PBoC defence of the yuan we saw ahead of the long holiday has resumed. Today's mid rate is once again a whopping 1100+ points from the modelled estimate aonce again appear to be rusted to the 7.17 big figure.
PBOC injects 20bn via 7-day RR, sets rate at 1.8%
- 319 bn yuan of RRs mature today
- thus a net 299bn yuan drain on the day in OMOs
The big drains will continue this week after the holiday.
