The People’s Bank of China (PBOC) is set to release its daily USD/CNY reference rate at approximately 0115 GMT. As China’s central bank, the PBOC plays a key role in guiding the value of the yuan (also known as the renminbi or RMB) through a managed floating exchange rate system.
Each trading day, the PBOC sets a central midpoint for the yuan against a basket of currencies, primarily the U.S. dollar. This midpoint acts as the official reference rate for the day’s currency trading. The central bank factors in market supply and demand, economic indicators, and global currency movements when determining the rate.
Under current policy, the yuan is allowed to fluctuate within a trading band of ±2% from the set midpoint. This range can be adjusted by the PBOC in response to broader economic conditions or policy goals.
Should the currency approach the limits of this band or show signs of extreme volatility, the PBOC may step in to stabilize the market. It does so by buying or selling the yuan, aiming to ensure orderly market conditions and gradual exchange rate adjustments.
This daily rate announcement is closely watched by global financial markets, as it signals China’s stance on currency management and provides insight into the country’s broader economic policy.
