PBOC sets USD/CNY fixing at 6.8130, yuan weakens for second day

The People's Bank of China guided the yuan weaker for a second straight session, setting the daily fixing at 6.8130 per dollar.

The People's Bank of China set the USD/CNY reference rate at 6.8130 on Thursday, compared with the previous day's fix of 6.8096 and a Reuters-compiled analyst estimate of 6.7752. The fixing represents the third consecutive session of yuan weakening, following a move to 6.8096 on Wednesday from 6.8108 on Tuesday.

The PBOC's daily fixing mechanism caps how far the onshore yuan can move during the trading session, with the spot rate permitted to trade within a 2 percent band on either side of the reference rate. The 378-pip gap between Thursday's official fixing and the Reuters estimate signals the central bank's tolerance for a measured depreciation path, according to market participants tracking the divergence.

China's currency faces headwinds from a broadly stronger US dollar. The Federal Reserve held its benchmark rate at 5.25 percent to 5.50 percent at its June meeting while signaling the possibility of a rate increase in 2026, pushing the greenback to its highest level since late March. The signing of a US-Iran peace deal on Wednesday triggered a modest dollar retreat, with the euro rebounding above 1.1500 and the Australian dollar climbing above 0.7000, but the yuan's fixing trajectory suggests the PBOC is not using the window to strengthen the currency.

The PBOC employs a broad set of monetary policy instruments beyond the daily fixing, including the 7-day Reverse Repo Rate, the Medium-term Lending Facility, foreign exchange interventions, and adjustments to the Reserve Requirement Ratio. The Loan Prime Rate serves as China's benchmark lending rate, and changes to it directly influence borrowing costs for loans and mortgages. The PBOC's next major policy decision is the monthly fixing of the 1-year Loan Prime Rate, scheduled for June 22.

For global investors, the yuan's direction carries implications beyond China's borders. A weaker renminbi reduces the dollar-denominated returns on Chinese assets held by foreign investors while lowering the cost of Chinese exports — a dynamic that could reignite trade tensions with the US and Europe. The offshore yuan typically trades at a discount to the onshore rate during periods of depreciation pressure, reflecting capital outflow concerns.

This article is for informational purposes only and does not constitute investment advice.