20.06.2025 06:04

The People's Bank of China (PBOC) established the USD/CNY central exchange rate at 7.1695 for the upcoming trading session on Friday. This represents a slight strengthening of the yuan against the dollar compared to the previous day's 7.1729 rate and the 7.1801 Reuters forecast.

The PBOC's primary mandate is maintaining price stability, encompassing exchange rate stability, and fostering economic growth. Furthermore, the bank actively pursues financial reforms, including the expansion and modernization of the financial market.

Unlike independent central banks in Western nations, the PBOC operates under significant influence from the Chinese Communist Party (CCP). While the governor traditionally holds considerable power, the current governor, Mr. Pan Gongsheng, also serves as the CCP Committee Secretary, highlighting the Party's direct involvement in the bank's decision-making processes.

China's central bank employs a diverse array of monetary policy tools, differing from Western approaches. These tools include the seven-day Reverse Repo Rate, Medium-term Lending Facility, foreign exchange interventions, and Reserve Requirement Ratio. Crucially, the Loan Prime Rate (LPR) serves as the benchmark interest rate, influencing loan, mortgage, and savings interest rates, and subsequently impacting the Renminbi's exchange rate.

Despite a state-dominated financial landscape, China boasts 19 private banks, albeit a small percentage of the overall system. Prominent among these are digital lenders WeBank and MYbank, supported by tech giants Tencent and Ant Group, respectively, reflecting a gradual liberalization within the Chinese financial sector since 2014, when private, fully-capitalized lenders were first permitted. Information sourced from internet resources.