The People’s Bank of China (PBOC), China’s central bank, is responsible for setting the daily midpoint of the yuan (also known as renminbi or RMB). The PBOC follows a managed floating exchange rate system that allows the value of the yuan to fluctuate within a certain range, called a “band,” around a central reference rate, or “midpoint.” It’s currently at +/- 2%.
The setting of the USD/ CNY reference rate for today at 7.0051 is the strongest for CNY since May 16 or 2023.
The previous close was 6.9720
PBOC injects 158.3bn yuan through 7-day reverse repos at an unchanged rate of 1.4%.
Separately, China’s ultra-low deposit rates are pushing households to redeploy trillions into markets, lifting equities and alternative assets.
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Around US$7trn shifting from maturing deposits into higher-yielding assets
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Deposit rates near 1% accelerating search for returns
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50trn yuan of deposits mature in 2026, up sharply from last year
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Stocks, insurance and gold attracting strong inflows
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Regulators tightening oversight to limit speculation
Chinese households are in the early stages of reallocating an estimated US$7 trillion from maturing bank time deposits into higher-yielding investments, as ultra-low deposit rates accelerate a broad-based search for returns across financial markets.
The shift reflects a sharp decline in the appeal of traditional savings products. Time deposit rates at major Chinese banks have fallen toward 1%, prompting households to look beyond cash holdings after years of subdued returns from property and intermittent volatility in equity markets.
Data and market estimates suggest around 50 trillion yuan in household deposits are set to mature in 2026, roughly 10 trillion yuan more than last year, with a large share concentrated in state-owned banks during the first half of the year. As those funds roll off, increasing amounts are flowing into equities, wealth management products, insurance policies and alternative assets such as gold.
The rotation is already visible in asset prices. Chinese equities surged last month, adding more than US$1 trillion in market capitalisation, while the STAR (Nasdaq-style tech board) 50 Index has risen more than 12% so far in 2026. Demand for insurance products has also strengthened, reflecting households’ preference for higher-yielding yet relatively stable alternatives to deposits. Gold prices have meanwhile pushed to record highs, benefiting from both domestic demand and broader global tailwinds.
Beijing has welcomed the reallocation as part of a longer-term effort to deepen capital markets and reduce the economy’s reliance on bank-centric savings. Policymakers see a gradual shift toward market-based investment as supportive of more sustainable growth and improved capital allocation.
However, authorities remain cautious. Regulators have moved to tighten margin financing rules and stepped up monitoring of trading activity to prevent speculative excesses reminiscent of past boom-and-bust cycles. The approach reflects a desire to encourage participation without allowing leverage-driven volatility to undermine financial stability.
The People’s Bank of China has also signalled it will rely on targeted policy tools rather than aggressive rate cuts, reinforcing incentives for households to deploy savings more productively while keeping broader financial risks in check.
The rotation of household savings into markets supports Chinese asset prices but raises volatility risks, reinforcing Beijing’s push for tighter supervision alongside gradual financial liberalisation.
