The People’s Bank of China sets the daily reference rate above market expectations, signaling potential yuan depreciation pressure.
The People’s Bank of China set the USD/CNY reference rate at 6.7905, weaker than the Reuters estimate of 6.7452. The fix allows the yuan to trade within a 2% band around this level during the session.
The move follows recent efforts to support liquidity, including a shift toward overnight reverse repos as a core tool. Market expectations had centered on a stronger yuan fix, reflecting recent dollar weakness and easing Fed rate hike bets.
The yuan’s weaker-than-expected fix may reflect broader pressures, including ongoing economic challenges and central bank policy adjustments.