PBOC sets USD/ CNY central rate at 7.1878 (vs. estimate at 7.2868)

Earlier from the Bank, signalling the likelihood of interest rate cut or cuts this year:

• PBOC says interest rate cuts are likely in 2025 “at an appropriate time”

More:

• RBC forecasts a much weaker yuan in 2025, project USD/CNY to 7.55 by year end

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People’s Bank of China USD/CNY reference rate is due around 0115 GMT.

The People’s Bank of China (PBOC), China’s central bank, is responsible for setting the daily midpoint of the yuan (also known as renminbi or RMB). The PBOC follows a managed floating exchange rate system that allows the value of the yuan to fluctuate within a certain range, called a “band,” around a central reference rate, or “midpoint.” It’s currently at +/- 2%.

The previous close was 7.2994

In open market operations (OMOs):

PBOC injects 19bn yuan via 7-day RR, sets rate at 1.5%

• 108bn yuan mature today
• net drain is 88bn yuan

This article was written by Eamonn Sheridan at www.forexlive.com.