Key Moments
- The People’s Bank of China set Monday’s USD/CNY central parity at 6.8088.
- The new fixing compares with a previous central rate of 6.8109.
- The setting contrasted with a Reuters estimate of 6.7544 for the session’s reference rate.
Daily USD/CNY Fixing Update
On Monday, the People’s Bank of China (PBOC) set the central USD/CNY reference rate for the upcoming trading session at 6.8088. This follows the prior session’s fixing of 6.8109. The new level also differed from a Reuters estimate of 6.7544 for the day’s midpoint.
| Fixing Detail | USD/CNY Level |
|---|---|
| Current session central rate | 6.8088 |
| Previous session central rate | 6.8109 |
| Reuters estimate | 6.7544 |
PBOC: Role and Policy Mandate
The People’s Bank of China’s primary monetary policy goals are to maintain price stability, which includes stabilizing the exchange rate, and to support economic growth. The central bank also focuses on advancing financial reforms, including the opening and development of China’s financial markets.
Ownership and Governance Structure
The PBOC is owned by the state of the People’s Republic of China, meaning it is not regarded as an independent institution. Management and strategic direction are heavily influenced by the Chinese Communist Party (CCP) Committee Secretary, who is nominated by the Chairman of the State Council, rather than by the governor alone. However, Mr. Pan Gongsheng currently holds both of these posts.
Key Monetary Policy Instruments
Compared with central banks in many Western economies, the PBOC deploys a wider array of tools to pursue its objectives. Its core instruments include the seven-day Reverse Repo Rate, the Medium-term Lending Facility (MLF), foreign exchange market interventions, and the Reserve Requirement Ratio (RRR).
China’s benchmark lending benchmark, the Loan Prime Rate (LPR), is central to domestic financing conditions. Adjustments to the LPR directly affect borrowing costs on loans and mortgages, as well as returns on savings. Through shifts in the LPR, the PBOC can also influence the exchange rate of the Chinese Renminbi.
Private Banking in China
China permits privately owned banks to operate in its financial system. There are 19 private banks, representing a relatively small part of the overall sector. The largest among them are digital lenders WeBank and MYbank, which are backed by technology companies Tencent and Ant Group, according to The Straits Times. In 2014, authorities allowed domestically owned banks fully funded by private capital to participate in the traditionally state-dominated financial industry.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
