Key Moments
- PBOC set the USD/CNY central parity at 6.7829 for Wednesday’s session, above the prior fix of 6.7809.
- The new fixing contrasted with a 6.7238 estimate compiled by Reuters.
- China’s central bank uses multiple tools, including the Loan Prime Rate and foreign exchange operations, to guide monetary and exchange-rate conditions.
Daily USD/CNY Fixing Update
The People’s Bank of China (PBOC) set the central parity rate for USD/CNY at 6.7829 for Wednesday’s trading session. This compares with the previous day’s official fixing of 6.7809 and a Reuters estimate of 6.7238.
| Fixing Detail | USD/CNY Level |
|---|---|
| Current PBOC central rate | 6.7829 |
| Previous day’s fix | 6.7809 |
| Reuters estimate | 6.7238 |
PBOC Mandate and Objectives
The People’s Bank of China serves as the country’s central bank, with core monetary policy goals focused on maintaining price stability, including exchange-rate stability, and fostering economic growth. It also has a mandate to advance financial-sector reforms, such as 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 (PRC) and is not regarded as an independent central bank. The Chinese Communist Party (CCP) Committee Secretary, who is nominated by the Chairman of the State Council, exerts significant influence over the central bank’s management and strategic direction, rather than the governor alone. Mr. Pan Gongsheng currently holds both roles.
Key Policy Instruments
Compared with Western central banks, the PBOC employs a wider range of monetary policy tools to achieve its objectives. Its primary instruments include:
- Seven-day Reverse Repo Rate
- Medium-term Lending Facility (MLF)
- Foreign exchange market interventions
- Reserve Requirement Ratio (RRR)
The Loan Prime Rate (LPR) functions as China’s key benchmark rate. Adjustments to the LPR influence borrowing costs on loans and mortgages, as well as returns on savings, and can also affect the exchange rate of the Chinese renminbi.
Role of Private Banks in China
China permits the operation of private banks, although they remain a relatively small part of the overall financial system, with 19 such institutions. The largest among them are digital lenders WeBank and MYbank, backed by Tencent and Ant Group, respectively, according to The Straits Times. In 2014, authorities approved the establishment of domestic banks fully funded by private capital to participate in the state-dominated banking sector.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
