PBOC sets USD/CNY reference rate at 7.1201 vs. 7.289 previous

People’s Bank of China (PBOC) set the USD/CNY central rate at 7.1201 on Monday, versus previous fix of 7.289 and market expectations of 7.1186. It's worth noting that the USD/CNY closed near 7.1263 the previous day.

"With 25 billion Yuan worth of reverse repos maturing on Monday, China central bank drains 23 billion Yuan on a net basis on the day," said Reuters following the PBOC Fix announcements.

About PBOC fix

China maintains strict control of the yuan’s rate on the mainland.

The onshore yuan (CNY) differs from the offshore one (CNH) in trading restrictions, this last one is not as tightly controlled.

Each morning, the People’s Bank of China (PBOC) sets a so-called daily midpoint fix, based on the yuan’s previous day's closing level and quotations taken from the inter-bank dealer.