Started by forex4you, Jun 02, 2023, 06:26 am
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People's Bank of China USD/CNY reference rate is due around 0115 GMT.
The People's Bank of China (PBOC), China's central bank, is responsible for setting the daily midpoint of the yuan (also known as renminbi or RMB). The PBOC follows a managed floating exchange rate system that allows the value of the yuan to fluctuate within a certain range, called a "band," around a central reference rate, or "midpoint." It's currently at +/- 2% and some think it could widen to 3% this year. The PBOC governor on the weekend highlighted the trend towards more liberalization of FX.
How the process works:
Note that the PBOC's management of the yuan's exchange rate has been a source of controversy, with some arguing that the central bank undervalues the currency to gain a trade advantage. However, in recent years, China has been moving towards a more market-oriented exchange rate system and has allowed greater flexibility in the yuan's value.
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