12.06.2025 01:37

The People's Bank of China (PBOC) established the USD/CNY central exchange rate at 7.1803 for Thursday's trading session. This represents a slight adjustment from the previous day's 7.1815 rate, and differs from a Reuters estimate of 7.1703.


The PBOC's core mandate encompasses maintaining price stability, including exchange rate stability, and fostering economic growth. Simultaneously, the central bank actively pursues financial reforms, aiming to liberalize and expand China's financial markets.


Unlike independent central banks in Western nations, the PBOC's operations are significantly influenced by the Chinese Communist Party (CCP). While the governor formally heads the PBOC, the CCP Committee Secretary, appointed by the State Council Chairman, wields considerable authority over its direction. Currently, Mr. Pan Gongsheng holds both positions.


The PBOC employs a diverse range of monetary policy tools, diverging from Western approaches. These tools include the seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions, and Reserve Requirement Ratio (RRR). The Loan Prime Rate (LPR), however, serves as China's benchmark interest rate, impacting loan, mortgage, and savings interest rates, and consequently, the Renminbi's exchange rate.


Despite the dominance of state-owned banks, China's financial landscape includes 19 privately owned banks. While a relatively small portion of the overall system, prominent examples include the digital lenders WeBank and MYbank, affiliated with Tencent and Ant Group, respectively. These private banks emerged following the 2014 decision to allow fully privately-funded domestic lenders into the sector. Information from internet sources confirms this development.