PBOC sets USD/CNY midpoint at 6.8397, weaker than the 6.8072 estimate, signaling potential yuan depreciation pressure.
The People’s Bank of China set the daily USD/CNY reference rate at 6.8397, above the 6.8072 estimate from analysts. The yuan is permitted to trade within a 2% band around this rate, a mechanism used to manage volatility amid external pressures.
This marks a deviation from expectations, as the fix suggests a softer stance compared to prior consensus. The central bank also left its Loan Prime Rates unchanged, with the 1-year LPR at 3% and the 5-year at 3.5%, maintaining stability in borrowing costs.
The move comes as global bond yields rise, with U.S. 30-year yields hitting 2007 highs, adding to currency market tensions.