PBOC sets USD/ CNY mid-point today at 7.1031 (vs. estimate at 7.1340)

<p>The People's Bank of China set the onshore yuan (CNY) reference rate for the trading session ahead.</p><ul><li>USD/CNY is the onshore yuan. Its permitted to trade plus or minus 2% from this daily reference rate.</li><li>CNH is the offshore yuan. USD /CNH has no restrictions on its trading range.</li><li>A significantly stronger or weaker rate than expected is typically considered a signal from the PBOC.</li></ul><p>The previous close was 7.1369.</p><p>The Bank has set the rate today is the strongest for the CNY since June 5.</p><p>PBOC injects 438bn via 7-day RR, sets rate at an unchanged 1.8%</p><ul><li>460bn yuan of RRs mature today</li><li>thus a net 22bn yuan drain on the day in Open Market Operations (OMOs)</li></ul><p>In the face of growing public debt, Chinese financial regulators have been increasing liquidity at a never-before-seen rate in recent months in an attempt to contain short-term interest rate volatility. There have been six instances where China extended more than 1 trillion yuan in net liquidity in a weeklong span. Four of those weeks occurred in the months since September.</p>

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