USD/CNY fix and rate cut: 6.8198 vs. the last close of 6.8170, 1 and 5 year LPR cut by 0.5%

In recent trade today, the People’s Bank of China (PBOC) set the yuan (CNY) at 6.8198 vs. the last close of 6.8170.

It also cut the 1 year loan prime rate to 3.65% (est 3.6%, prev 3.7%) and the 5 year loan prime rate to 4.3% (est 4.35%, prev 4.45%).

About the fix

China maintains strict control of the yuan’s rate on the mainland.

The onshore yuan (CNY) differs from the offshore one (CNH) in trading restrictions, this last one is not as tightly controlled.

Each morning, the People’s Bank of China (PBOC) sets a so-called daily midpoint fix, based on the yuan’s previous day's closing level and quotations taken from the inter-bank dealer.