PBOC sets USD/ CNY reference rate for today at 6.9398 (vs. estimate at 6.9045)

💡 DMK Insight

The PBOC’s latest move to inject CNY 145 billion via reverse repos is a clear signal of its intent to manage liquidity amid ongoing economic pressures. With the yuan’s reference rate set at 6.9033 and allowed to fluctuate within a 2% band, traders should keep an eye on how this affects the currency’s volatility. The unchanged reverse repo rate at 1.40% suggests the central bank is maintaining a cautious stance, likely to support economic stability while avoiding excessive depreciation of the yuan. This could impact forex pairs like USD/CNY, especially if traders start to position themselves based on anticipated fluctuations. However, there’s a flip side: if the yuan weakens beyond the 2% threshold, it could trigger further interventions from the PBOC, leading to increased volatility. Watch for any shifts in market sentiment around this reference rate, as it could provide trading opportunities in both the yuan and related assets like commodities that are priced in CNY.