PBoC Open Market Ops: FXWW

From the FXWW Chatroom: – PBoC To Inject CNY 100 Bln Via 7 Day Reverse Repos
– PBoC To Inject CNY 90 Bln Via 14 Day Reverse Repos
– PBoC To Inject CNY 10 Bln Via 63 Day Reverse Repo
– PBoC Fixes USDCNY Reference Rate At 6.4335 (prev fix 6.4372 prev close 6.4369)
Having some internet issues today, sorry this is a bit late
The Chinese yuan may further appreciate, but its current gain doesn’t mean China’s objective of keeping a stable exchange rate is changing, China Securities Journal said in a commentary Wednesday.
– Yuan’s gain since mid-Dec is due to the weakening of the U.S. dollar: paper
– Market expectation and investors’ behaviors may accentuate the short-term swing: newspaper
– Difficult for yuan to repeat last year’s 6% gain; outlook is mixed: newspaper
**TAKEAWAY: The commentary by the official security newspaper suggests the central bank will seek to maintain stability of the yuan and guide market expectation to minimize high volatilities.

China regards the yuan’s gain against the U.S. dollar secondary to its stability vs a basket of currencies, PBOC’s Financial News newspaper reported citing unidentified sources.
– PBOC needs not to set limits for the minimum or maximum of the yuan exchange rate against the U.S. dollar: newspaper citied sources
– Euro’s strength contributed to the weakening of the dollar: Financial News
– Yuan’s stable rise helps its internationalization, including more use in global trade and investment, appeal of yuan-denominated bonds, greater yuan allocation in other foreign nation’s FX reserves: newspaper cited sources.
* TAKEAWAY: Financial News seems positive on yuan’s outlook. PBOC may see a stronger yuan could help China’s desire to widen the global use of the yuan.

China banking regulators are targeting this year large financial entities created illegally with complicated structures and irregular investment activities, China Banking Regulatory Commission Chairman Guo Shuqing was citied as saying by Wednesday’s People’s Daily.
– Stability of China’s financial sector threatened by factors including non-performing bad assets, shadowy transactions and illicit activities: Guo
– Regulators’ key tasks are to strengthen risk controls, continue with deleveraging programs targeting corporate and household debt, curb property bubbles, and tackle the local government debt problem.

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