PBOC sets USD/ CNY mid-point today at 7.0583 (vs. prior close at 7.0450)

The People's Bank of China (PBOC) has set the USD/CNY midpoint at 7.0583, up from the prior closing of 7.0450. This increase is commonly interpreted as a signal that the PBOC is countering appreciation pressure on the yuan. The bank injected 88.3 billion yuan via 7-day reverse repos at an unchanged rate of 1.40%, alongside a 100 billion yuan injection through 14-day reverse repos. These measures highlight the PBOC's focus on managing liquidity without shifting its policy stance. By opting for 14-day repos, the PBOC aims to address funding needs while stabilizing short-term rates, further indicating a preference for fine-tuning liquidity tools rather than making drastic policy changes. The strategy signals caution, with the bank remaining sensitive to currency stability and potential financial risks.