Key Moments
- The People’s Bank of China set the USD/CNY central parity at 6.7899 for Wednesday’s session.
- The new fixing level compared with a previous reference rate of 6.7928.
- The USD/CNY adjustment was marginal, reflecting a small change in the official daily midpoint.
Session Fixing Details
On Wednesday, the People’s Bank of China (PBoC) set the central USD/CNY reference rate for the upcoming trading session at 6.7899. This compares with the prior day’s central parity level of 6.7928.
| Parameter | Value |
|---|---|
| New USD/CNY central rate | 6.7899 |
| Previous USD/CNY central rate | 6.7928 |
PBoC – Role and Mandate
The primary monetary policy objectives of the People’s Bank of China are to safeguard price stability, including exchange rate stability, and to promote economic growth. The central bank also pursues financial reforms, including measures aimed at opening and developing the financial market.
The institution is owned by the state of the People’s Republic of China and is therefore not classified as an autonomous central bank. The Chinese Communist Party Committee Secretary, nominated by the Chairman of the State Council, exerts key influence over the institution’s management and policy direction, rather than the governor. However, Mr. Pan Gongsheng currently holds both of these posts.
Policy Toolkit and Benchmark Rates
The PBoC employs a wide range of monetary policy tools. Its main instruments include a seven-day Reverse Repo Rate, the Medium-term Lending Facility, foreign exchange interventions, and the Reserve Requirement Ratio. In addition, the Loan Prime Rate serves as China’s benchmark interest rate.
Adjustments to the Loan Prime Rate directly affect borrowing costs in the market, influencing loan and mortgage rates as well as returns on savings. By changing this rate, the central bank can also affect the exchange rate dynamics of the Chinese Renminbi.
Private Banking Landscape in China
Private banks are permitted to operate in China. There are 19 private banks, which represent a relatively small portion of the overall financial system. The largest among them are the digital lenders WeBank and MYbank, supported by technology companies Tencent and Ant Group, per The Straits Times.
In 2014, authorities allowed domestically funded lenders, fully capitalized with private capital, to participate in the state-dominated financial sector.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
