PBOC sets USD/ CNY reference rate for today at 7.1789 (vs. estimate at 7.2945)

<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 regular PBoC defence of the yuan we saw ahead of the long holiday has resumed. Today's mid rate is once again a whopping 1100+ points from the modelled estimate aonce again appear to be rusted to the 7.17 big figure. </p><p>PBOC injects 20bn via 7-day RR, sets rate at 1.8%</p><ul><li>319 bn yuan of RRs mature today
</li><li>thus a net 299bn yuan drain on the day in OMOs</li></ul><p>The big drains will continue this week after the holiday. </p>

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