The People’s Bank of China set Friday’s USD/CNY central rate at 6.7220, compared with the prior fix of 6.7253 and a Reuters estimate of 6.6947. The PBoC’s monetary policy objectives are to safeguard price stability, including exchange rate stability, while promoting economic growth, alongside pursuing financial reforms tied to opening and developing China’s financial markets.
Structure and Governance of the Central Bank
The central bank is state-owned under the People’s Republic of China, and is not treated as an autonomous institution. Its direction is influenced by the Chinese Communist Party Committee Secretary nominated by the Chairman of the State Council; Pan Gongsheng currently holds both that role and the governorship.
Monetary Policy Tools and Sector Reforms
Policy tools cited include a seven-day Reverse Repo Rate, a Medium-term Lending Facility and foreign exchange intervention, as well as the Reserve Requirement Ratio, while the Loan Prime Rate is described as the benchmark interest rate that transmits into loan and mortgage pricing and deposit returns, with potential effects on the renminbi exchange rate. China has 19 private banks, and reforms in 2014 allowed domestically funded private lenders to operate in the state-dominated sector.
