The People's Bank of China set the onshore yuan (CNY) reference rate for the trading session ahead.
- USD/CNY is the onshore yuan. Its permitted to trade plus or minus 2% from this daily reference rate.
- CNH is the offshore yuan. USD /CNH has no restrictions on its trading range.
- A significantly stronger or weaker rate than expected is typically considered a signal from the PBOC.
The previous close was 7.2920
The 7.1733 rate is a massive 1100+ points away from the modelled estimate of 7.2839. The People's Bank of China is continuing to aggressively support the yuan.
PBOC injects 208bn yuan in open market operations (OMOs) via 7-day reverse repos (RRs) at an unchanged rate of 1.8%
- PBOC injects 60bn via 14 day RR, sets rate at an unchanged rate of 1.95%
- 209bn yuan of RRs mature today
- thus a net 59bn yuan injection on the day in OMOs