The USD/CNY reference rate from People’s Bank of China is expected to be released at approximately 0115 GMT.

The daily midpoint of the yuan, or renminbi, is set by China’s central bank, the People’s Bank of China (PBOC). The PBOC oversees a managed floating exchange rate system which permits the yuan’s value to fluctuate within a specific range, known as a “band,” in relation to a central reference rate called the “midpoint.” At present, this band is set at +/- 2%, and experts speculate that it may expand to 3% during the current year.

“Understanding the working mechanism:”

It should be noted that there has been controversy surrounding how the PBOC (People’s Bank of China) handles the exchange rate of the yuan, with some claiming that it is intentionally undervalued to benefit trade. Nonetheless, in recent times, China has transitioned towards a more market-driven exchange rate system and has increased the flexibility of the yuan’s value.