Earlier, a People’s Bank of China rate cut:
PBOC 1-year Medium-term Lending Facility (MLF), rate cut to 2% (2.3% previously)
***
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.
The previous close was 7.0318
In open market operations (OMOs):
PBOC injects 196.5bn via 14-day RR, rate at 1.85%568 bn yuan reverse repo loans expire todaynet 372 bn liquidity drained from market in OMOs (note the MLF above)
This article was written by Eamonn Sheridan at www.forexlive.com.
