Central Banks

  • 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 6.7872

Yesterday’s reference rate was 6.7292. The People’s Bank of China has taken the axe to the CNY mid-rate today, lower (for CNY) by 600+ points.

The PBOC inject 10 yuan via 7 day reverse repos (rate remains at 2.1%)

  • 0bn yuan mature today
  • thus a net 10bn injection

This is the offshore yuan, CNH. Huge weakening.


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