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 made the biggest downward move in the daily fix since the Yuan was de-pegged last August.
– The Central Bank began to issue monthly Pledged Supplementary Lending to three policy banks starting in May.
– CFETS launched the standard Yuan forward (C-forward) in the interbank market on May 3rd.
– China’s Central Bank fixed the Yuan rate 378 pips weaker against the US Dollar to 6.4943 on May 4th, the biggest downward move since the Yuan was de-pegged against the US Dollar last August. Following the fix, the onshore USD/CNY broke 6.50, the first time in a month.
– Beginning in May, the PBOC will issue Pledged Supplementary Lending (PSL) to the three policy banks, China Development Bank, Agricultural Development Bank of China and China Import Bank, at the beginning of each month.
– On May 4th, the Central Bank added 100 billion yuan through 7-day reverse repurchase agreements (repos) with an interest rate of 2.25%. The reverse repos maturing on that day were 120 billion yuan. The net withdrawal was 20 billion yuan.
– China Foreign Exchange Trade System (CFETS), a sub-institution of the PBOC, launched standardized Yuan forward contracts (C-forward) in the interbank foreign exchange market on May 3rd. During the first trading day, 25 institutions provided quotations on 9 types of C-forwards; 21 institutions reached 62 C-forward deals.