China’s Market News: PBOC Unleased FX Committee For Daily Fixing

This daily digest focuses on market sentiment, new developments in China’s foreign exchange policy, changes in financial market regulations and Chinese-language economic coverage in order to keep DailyFX readers up-to-date on news typically covered only in Chinese-language sources.

– The PBOC guided the Yuan 1,202 pips stronger against the Pound on June 28th following yesterday’s aggressive move.

– The Central Bank launched the Chinese FX Committee, a self-disciplined mechanism for daily reference rates.

– In the first five months of 2016, the revenue of China’s SOEs fell -0.6% compared to a year prior.

Hexun News: Chinese leading online media of financial news.

- The PBOC continued to fix the onshore Yuan stronger against the Pound on June 28th on the back of the Brexit decision; the GBP/CNY was moved lower by 1,202 pips to 8.7992. On the other hand, the Central Bank fixed the Yuan 153 pips weaker against the US Dollar to 6.6528, a new low since December 2010. The Central Bank commented on the recent moves in Yuan rates and said that following the Brexit decision, the Yuan has seen depreciation against the US Dollar, but the Yuan maintained relatively stable to a basket of currencies.

PBOC News: China’s Central Bank

– The PBOC launched the Chinese FX Committee, a market coordination mechanism on June 27th. According to the Guidelines, the Committee is in charge of setting self-disciplined rules for the Yuan’s daily reference rates, as well as for trading in China’s FX interbank and client markets. The Committee includes representatives of interbank FX market participants and will promote fair-play competition, the orderly operation and healthy development of the FX market. This means that the Central Bank gives market participants more power over the Yuan reference rates.

The FX Committee is similar to the self-disciplined mechanism on interbank interest rates, which was set up on September 24th, 2013. Introducing self-disciplined mechanisms is considered as major steps that China is making to promote market-driven rates.