Key Moments
- The People’s Bank of China set the USD/CNY central parity rate at 6.7147 for the upcoming Thursday session.
- The new fixing compared with the previous day’s reference rate of 6.7165.
- The latest central rate differed from the 6.6596 estimate reported by Reuters.
Updated USD/CNY Central Parity Rate
The People’s Bank of China (PBOC) set the USD/CNY central reference rate for the upcoming Thursday trading session at 6.7147. This compares with the prior day’s fixing level of 6.7165 and a Reuters estimate of 6.6596 for the latest setting.
| Parameter | Value |
|---|---|
| Latest USD/CNY central rate (Thursday) | 6.7147 |
| Previous day’s fix | 6.7165 |
| Reuters estimate | 6.6596 |
Mandate and Role of the People’s Bank of China
The People’s Bank of China is responsible for maintaining overall price stability, which includes managing exchange rate stability, while also supporting economic growth. In addition, the central bank seeks to advance financial sector reforms, including efforts to open and further develop China’s financial markets.
Ownership and Governance Structure
The PBOC is owned by the state of the People’s Republic of China, and as such is not regarded as an independent institution. Oversight and strategic direction are heavily shaped by the Chinese Communist Party (CCP) Committee Secretary, who is nominated by the Chairman of the State Council. This role is more influential than that of the governor. Mr. Pan Gongsheng currently holds both the CCP Committee Secretary position and the governorship.
Policy Toolkit and Benchmark Rates
The PBOC employs a wide range of monetary policy instruments, which differs from the common frameworks used in many Western economies. Its key tools include the seven-day Reverse Repo Rate, the Medium-term Lending Facility, foreign exchange interventions, and adjustments to the Reserve Requirement Ratio.
China’s benchmark for lending costs is the Loan Prime Rate (LPR). Movements in the LPR directly affect the borrowing rates applied to loans and mortgages, as well as the returns on savings. By changing the LPR, the central bank can also impact the exchange rate of the Chinese renminbi.
Private Banking Presence in China
China permits privately owned banks to operate within its financial system, with 19 such institutions currently in existence. These entities represent a relatively small portion of the overall banking landscape. Among them, prominent digital lenders include WeBank and MYbank, which are supported by technology firms Tencent and Ant Group, according to The Straits Times.
In 2014, authorities allowed domestically owned banks that are fully funded by private capital to participate in the largely state-controlled financial sector.
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