PBOC sets USD/CNY reference rate at 6.8838 vs. 6.8747 previous

People’s Bank of China (PBOC) set the USD/CNY central rate at 6.8838 on Friday, versus Thursday's fix of 6.8747 and market expectations of 6.8820. It's worth noting that the USD/CNY closed near 6.8745 the previous day.

WITH 189 BLN YUAN WORTH OF REVERSE REPOS MATURING ON FRIDAY, CHINA CBANK DRAINS 172 BLN YUAN ON A NET BASIS ON THE DAY, per REUTERS CALCULATION.

About the fix

China maintains strict control of the yuan’s rate on the mainland.

The onshore yuan (CNY) differs from the offshore one (CNH) in trading restrictions, this last one is not as tightly controlled.

Each morning, the People’s Bank of China (PBOC) sets a so-called daily midpoint fix, based on the yuan’s previous day's closing level and quotations taken from the inter-bank dealer.