On Monday morning, the People's Bank of China decided to set the exchange rate of the yuan against the US dollar at 7.1702 yuan per dollar, while expectations indicated it would be set at 7.2617 yuan. The closing price of the pair in yesterday's session was 7.2595 yuan. Additionally, the bank injected 190.5 billion yuan through repos in the markets for 7 days at a yield of 1.5%.
It is worth noting that the People's Bank of China influences the price of the USD by pegging the value of its currency - the yuan - to the dollar. The bank uses a fixed exchange rate policy by managing the value of the yuan to keep it stable against a basket of currencies from countries deemed partners to China. The basket is measured against the USD because the United States is China's largest trading partner.
