11.06.2025 02:05

The People's Bank of China (PBOC) established the USD/CNY central exchange rate at 7.1815 for Wednesday's trading session. This represents a slight adjustment from the previous day's rate of 7.1840, diverging slightly from the 7.1801 Reuters forecast.

The PBOC's overarching monetary policy goals encompass maintaining price stability, including exchange rate stability, and fostering economic expansion. Simultaneously, the bank actively pursues financial reforms, aiming to liberalize and cultivate the financial market.

Unlike independent central banks in Western nations, the PBOC's operations are significantly influenced by the Chinese Communist Party (CCP). While the governor holds considerable power, the CCP Committee Secretary, appointed by the State Council Chairman, exerts substantial influence over the bank's strategic direction. Currently, Mr. Pan Gongsheng holds both positions.

In contrast to Western counterparts, the PBOC employs a wider array of monetary policy tools. These include the seven-day Reverse Repo Rate (RRR), the Medium-term Lending Facility (MLF), foreign exchange interventions, and the Reserve Requirement Ratio (RRR). The Loan Prime Rate (LPR), however, serves as China's key benchmark interest rate, impacting loan and mortgage rates, savings interest, and ultimately, the Renminbi's exchange rate.

While China boasts 19 privately owned banks, they constitute a relatively small segment of its financial landscape. Leading this sector are digital lenders WeBank and MYbank, backed by tech giants Tencent and Ant Group, respectively, according to information sourced from internet resources. Their presence reflects China's gradual liberalization of its financial sector, initiated in 2014 with the allowance of fully privately capitalized domestic lenders.