PBOC Nudges Yuan Fix Stronger as Central Parity Rate Edges Lower

Written by Sandra Leggero

Sandra Leggero has a background in financial markets, having spent more than 9 years in commodities trading for several European and Asian companies. She holds a degree in Economics from the University of Pavia and specializes in emerging markets.

, | Updated: December 23, 2025

Key Moments

The People’s Bank of China set the USD/CNY central parity rate at 7.0523 for Tuesday’s trading session.
The new fixing compares with the previous day’s reference rate of 7.0572.
The latest setting came in against a Reuters estimate of 7.0267.

Updated Central Parity Rate for USD/CNY

The People’s Bank of China (PBOC) set the central reference rate for the onshore yuan at 7.0523 per U.S. dollar for the upcoming Tuesday session. This official fixing compares with the prior trading day’s central rate of 7.0572 and a Reuters estimate of 7.0267.

USD/CNY Fixing Metrics	Rate
Current PBOC central parity rate	7.0523
Previous day’s PBOC fix	7.0572
Reuters estimate	7.0267

Mandate and Role of the People’s Bank of China

The People’s Bank of China is responsible for executing the country’s monetary policy framework. Its main objectives are to maintain price stability, including a stable exchange rate, while fostering economic growth. The central bank is also tasked with carrying out financial sector reforms aimed at opening and developing China’s financial markets.

Ownership and Governance Structure

The PBOC is a state-owned institution under the People’s Republic of China and is not regarded as an independent central bank. Its strategic direction is heavily influenced by the Chinese Communist Party (CCP) Committee Secretary, who is nominated by the Chairman of the State Council. This party role holds greater sway over the institution’s management and policy direction than the governor’s position. However, Mr. Pan Gongsheng currently holds both of these posts.

Policy Toolkit and Benchmark Rates

Compared with central banks in many Western economies, the PBOC employs a wide range of instruments to conduct monetary policy. Key tools include the seven-day Reverse Repo Rate, the Medium-term Lending Facility, foreign exchange market operations, and adjustments to the Reserve Requirement Ratio. In addition, the Loan Prime Rate (LPR) serves as China’s benchmark lending rate.

Changes in the LPR feed directly into borrowing costs for loans and mortgages, as well as returns on deposits. Through adjustments to the LPR, the PBOC can also affect the exchange rate of the Chinese renminbi.

Private Banking Sector in China

China permits the operation of private banks, though they represent only a small segment of the overall financial system. There are 19 private banks, with leading players including digital lenders WeBank and MYbank, which are backed by Tencent and Ant Group, respectively, according to The Straits Times.

In 2014, authorities allowed domestically funded lenders that are fully capitalized by private capital to participate in the state-dominated banking sector, expanding the role of private institutions within China’s financial landscape.