China sets yuan midpoint at stronger 671.8 per hundred dollars
Key Facts
The People's Bank of China set the currency's midpoint at 671.8 yuan per hundred dollars on October 23, 2026, according to official rates published by the State Administration of Foreign Exchange. The fixing was stronger for the yuan than in the previous session, when the midpoint stood at 671.95 yuan per hundred dollars on October 22. A decline in the number of yuan per the same dollar amount means the Chinese currency strengthened between the two fixings. The China Foreign Exchange Trade System announces the midpoints under authorization from the People's Bank of China, according to the official notice published by the administration. The notice sets 9:15 a.m. local time as the announcement time on each business day. The methodology for calculating the dollar midpoint excludes the highest and lowest quotes submitted by market makers. A weighted average of the remaining quotes is then calculated to determine the midpoint, according to the published methodology.
The fixing followed the October 19 release of data by China's National Bureau of Statistics showing economic growth accelerated in the third quarter. Gross domestic product grew 4.5% year on year in the third quarter of 2026, according to the bureau. Annual growth had stood at 4.3% in the second quarter before picking up in the following period. On a quarter-on-quarter basis, the bureau said "GDP grew 1.2% in the third quarter." Over the first nine months, from January to September, real GDP grew 4.6% compared with the same period a year earlier. In industry, value-added output at enterprises above a designated size rose 5.5% year on year in September. Industrial growth accelerated by 0.3 percentage points from the previous month, according to the same statistical release.
On lending rates, China kept its one-year loan prime rate at 3.00% in its October 20 announcement, according to Reuters. The five-year loan prime rate also remained unchanged at 3.50%. The decision to hold both rates followed the release of growth and industrial activity data and preceded the latest yuan fixing. In short-term liquidity operations, the central bank had announced during September a period for conducting overnight reverse repurchase operations, according to Investing.com. The announced period began on September 28 and ran through October 8. The announcement identified meeting short-term liquidity needs in the banking system as the objective of those operations.
Alongside lending decisions and the daily currency fixing, China's central bank is considering a change to the main instrument it uses to steer monetary policy. Reuters reported on October 19 that the bank was considering making the overnight reverse repo rate its main policy rate. The move aims to improve the transmission of monetary policy to the economy, according to the agency. Reuters described the step under consideration as "shifting the main policy rate to the overnight reverse repo rate." Following the announcement of the proposed shift on October 19, China's 30-year government bond yield fell by more than 1 basis point, according to the agency. As part of the forthcoming measures covered in the same announcement, central bank Governor Pan Gongsheng said the bank was also moving toward establishing a facility to support liquidity at non-bank financial institutions.