USD/CNY fix and liquidity operations: 6.3599 vs est 6.3604, PBoC to sell 700 Bln Yuan of 1-year MLF

In recent trade today, the People’s Bank of China (PBOC) set the yuan (CNY) at 6.3599 vs the estimate of 6.3604 and the prior 6.3677.

Additionally, in the repo market, the central bank is to sell 700 Bln Yuan of 1-Year MLF with 500 Bln yuan maturing and it has cut the rate to 2.85% from 2.95%.

About the 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 closing level and quotations taken from the inter-bank dealer.