Key Moments
- The People’s Bank of China set the USD/CNY central parity at 6.8047 for Friday’s session.
- The new fixing compared with the prior day’s reference rate of 6.8088.
- The 6.8047 setting contrasted with a 6.7808 estimate reported by Reuters.
Latest USD/CNY Central Parity Fix
On Friday, the People’s Bank of China (PBoC) set the daily central reference rate for the onshore US dollar – Chinese yuan pair (USD/CNY) at 6.8047. This fixing was set against the previous day’s central parity of 6.8088 and a 6.7808 estimate reported by Reuters for Friday’s level.
| Fixing Reference | USD/CNY Level |
|---|---|
| Friday PBoC central rate | 6.8047 |
| Previous day’s fix | 6.8088 |
| Reuters estimate | 6.7808 |
Mandate and Role of the People’s Bank of China
The People’s Bank of China operates as China’s central bank with monetary policy goals that include maintaining price stability, which also encompasses exchange rate stability, and fostering economic growth. Its responsibilities extend to advancing financial sector reforms, including measures aimed at opening and developing the domestic financial markets.
Ownership and Governance Structure
The PBoC is a state-owned institution under the People’s Republic of China and is therefore not regarded as independent. Oversight of the central bank is heavily influenced by the Chinese Communist Party (CCP) Committee Secretary, who is nominated by the Chairman of the State Council. This position exerts greater influence on the bank’s direction and management than the governor’s role. However, Mr. Pan Gongsheng currently holds both of these posts.
Key Monetary Policy Instruments
The PBoC employs a wide range of tools to conduct monetary policy, differing from the frameworks used in many Western economies. Its main instruments include the seven-day Reverse Repo Rate, the Medium-term Lending Facility, foreign exchange market interventions, and the Reserve Requirement Ratio.
China’s benchmark interest rate is the Loan Prime Rate (LPR). Adjustments to the LPR affect borrowing costs across the economy, including loans and mortgages, as well as the returns on savings. Through changes in the LPR, the central bank can also influence the exchange rate of the Chinese renminbi.
Private Banking Sector in China
Private banks operate alongside state-owned institutions within China’s financial system, although they represent a relatively small segment. There are 19 private banks in the country. The largest among them are digital lenders WeBank and MYbank, which are backed by Tencent and Ant Group, respectively, per The Straits Times. In 2014, authorities allowed domestically funded lenders fully capitalized by private investors to enter the state-dominated banking landscape.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
