PBOC sets USD/ CNY reference rate for today at 7.1727 (vs. estimate at 7.3174)

<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 7.3115</p><p>The modelled estimate was 7.3174, which means the differential to the actual is a new record high 1447 points.</p><p>Also, the difference between yesterday's close and the reference rate setting is close to 2%. Check out the bullet points a few lines above, the People's Bank of China is going to be close to mandatory intervention in the USD/CNY market if trades take place above (7.1727*1.02 =) 7.3162. This could be an interesting session. </p><p>PBOC injects 378bn in open market operations (OMOs) via 14-day RR, sets rate at 1.95%</p><ul><li>208bn yuan of RRs mature today</li><li>thus a net 170bn yuan injection on the day in OMOs</li></ul><p>The 14-dayers will be helpful providing liquidity over the week-long holiday coming up:</p><ul><li><a href="https://www.forexlive.com/news/china-golden-week-holidays-coming-up-surging-travel-will-boost-demand-for-oil-20230925/" target="_blank" rel="follow" data-article-link="true">China Golden Week holidays coming up – surging travel will boost demand for oil</a></li></ul>

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