Higher USD? - no thanks says the PBOC. CNY highest since November 2015 against the USD

The Bank skips OMOs today

  • cites relatively high banking system liquidity
  • net drain 270bn yuan today
  • net drain 320 bn yuan for the week via OMOs

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A few items from China this morning:

China Securities Journal front-page commentary written by a reporter

  • Monetary policy is expected to stay prudent and neutral
  • not yet a window for "traditional" interest rate increase,
  • China would raise benchmark interest rates within the year if economic growth speeds up and inflation increases substantially

Xinhua says targeted RRR cuts have had limited impact on liquidity

  • PBOC to withdraw liquidity in OMOs
  • PBOC may adjust OMOs for deleveraging impact