PBOC sets USD/ CNY reference rate for today at 7.0870 (vs. estimate at 7.0828)

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.

Mainland China is back from holidays on Monday and Tuesday today.

The previous close was 7.0958.

The 7.0870 reference rate today is the strongest for CNy since January this year.

In open market operations (OMOs):

• PBOC injects 568bn via 7-day RR, sets rate at 1.7%
• 487.5 bn yuan reverse repo and 591 bn yuan MLF loans expire today
• net 510.3 bn liquidity drained from market

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