6.7188: PBOC fixes USD/CNY reference rate versus 6.7168 previously

6.7188 is the USD/CNY central rate set by the People’s Bank of China (PBOC) for Friday’s trading session. The previous day’s fixing was 6.7168.

PBOC: Key Questions Answered

People's Bank of China: Policy Objectives

Price stability, including exchange rate stability, and economic growth are the core monetary policy objectives of the People's Bank of China (PBoC). Its remit also includes financial reforms aimed at opening up and developing the financial market.

PBoC: State Ownership and Leadership

State ownership by the People's Republic of China (PRC) means the PBoC is not regarded as an autonomous institution. Rather than the governor, it is the Chinese Communist Party (CCP) Committee Secretary who has a key influence over the bank’s management and direction. The Chairman of the State Council nominates the secretary. Mr Pan Gongsheng currently occupies both the secretary and governor posts, however.

PBoC: Main Monetary Policy Instruments

To meet its objectives, the PBoC deploys a wider range of monetary policy instruments than those used in Western economies. Its main tools comprise the seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). China’s benchmark interest rate, however, is the Loan Prime Rate (LPR). Adjustments to the LPR directly affect market borrowing rates for loans and mortgages, as well as the interest paid on savings. The central bank can also use LPR changes to influence Chinese Renminbi exchange rates.

19 Private Banks Operate in China

China permits private banks and has 19 of them, accounting for only a small share of its financial system. According to The Straits Times, digital lenders WeBank and MYbank are the largest, backed by technology giants Tencent and Ant Group. Domestic lenders funded entirely by private capital were allowed to enter China’s state-dominated financial sector in 2014.

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