PBOC is expected to set the USD/CNY reference rate at 6.9697 – Reuters estimate
The People's Bank of China (PBOC) is expected to set the USD/CNY reference rate at 6.9697, a key indicator in Asian forex markets. The PBOC operates a managed floating exchange rate system, allowing the yuan to trade within a 2% band around a daily midpoint. This midpoint is influenced by various factors, including previous closing prices and economic conditions. The fixing serves as a policy signal, with a stronger midpoint indicating resistance to depreciation and a weaker one suggesting tolerance for a softer currency. It is particularly significant during periods of global volatility.
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