17.06.2025 01:37

The People's Bank of China (PBOC) established the US dollar to Chinese yuan (USD/CNY) central exchange rate at 7.1746 for Tuesday's trading session. This represented a slight strengthening of the yuan against the dollar compared to the previous day's 7.1789 fixing, and even more so when compared to the 7.1820 Reuters forecast.

The PBOC's core mandate centers around maintaining price stability, including exchange rate stability, while fostering economic growth. Simultaneously, it actively pursues financial reforms, aiming to enhance the openness and development of China's financial markets. Unlike many Western central banks, the PBOC operates under significant government influence.

Ownership rests with the People's Republic of China (PRC), limiting its autonomy. Crucially, the Chinese Communist Party (CCP) Committee Secretary, appointed by the State Council Chairman, significantly impacts the PBOC's governance and strategic direction, although currently, Mr. Pan Gongsheng holds both positions.

The PBOC employs a diverse range of monetary policy tools, including adjustments to the seven-day reverse repo rate, medium-term lending facility, foreign exchange interventions, and the reserve requirement ratio. However, the Loan Prime Rate (LPR), China's benchmark interest rate, plays a pivotal role, directly affecting loan and mortgage rates, savings interest, and influencing the Renminbi's exchange rate.

While China boasts 19 privately owned banks, they represent a minor segment of the financial system. Prominent examples include the digital lenders WeBank and MYbank, respectively backed by Tencent and Ant Group, as reported by The Straits Times. This limited private sector participation reflects a relatively recent development, with full authorization for privately capitalized domestic lenders only granted in 2014. This information was compiled from internet sources.