PBOC sets USD/ CNY central rate at 7.1068 (vs. estimate at 7.208 )

The People's Bank of China set the onshore yuan (CNY) reference rate for the trading session ahead.

• USD/CNY is the onshore yuan. Its permitted to trade plus or minus 2% from this daily reference rate.
• CNH is the offshore yuan. USD /CNH has no restrictions on its trading range.
• A significantly stronger or weaker rate than expected is typically considered a signal from the PBOC.

The previous close was 7.1987

The big news is the rate cut:

• PBOC Rate CUT ___ (LPR): 1-year 3.45% (prior 3.45%) 5-year 3.95% (prior 4.20%)

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PBOC injects 41bn via 7-day RR, sets rate at an unchanged 1.8%

• 339bn yuan of RRs mature today
• thus a net 298bn yuan drain on the day in OMOs