# China : PBOC tweaks model guiding Yuan fix to underpin financial stability | BBVA Research

> On May 26, the PBOC announced it would add a counter-cyclical adjustment factor to its model for the daily USDCNY midpoint fixing. The aim is to reduce excess yuan volatility and curb one-way bets. Analysts note this risks reverting toward the pre-August 2015 exchange rate regime.

- Date: 2017-05-30 · published 2017-05-30T12:00:00.000Z
- Category: policy · region China · magnitude low
- Page: https://feedsoft.ai/events/5660-china-pboc-tweaks-model-guiding-yuan-fix-to-underpin-financial-stability-bbva
- Commodities: [Chinese Yuan (CNY per USD)](https://feedsoft.ai/c/USDCNY.md)

## Why it matters

A less market-determined yuan fix changes the currency backdrop for China-linked feed demand and import costs, though the direct link to feed commodity prices is indirect.

## Read by commodity

- USDCNY: neutral

## Linked price moves

| Commodity | Date | Window | Change % | z-score | Why linked |
| --- | --- | --- | --- | --- | --- |
| USDCNY | 2017-06-01 | 5 | -1.2% | -3.7 | The PBOC's counter-cyclical factor added to the USDCNY fixing model lets authorities lean against dollar strength, which supports yuan appreciation (CNY per USD down). |

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| USDCNY | 2017-05-27 | [China Tweaks Yuan’s Fix to Keep Currency Stable - Caixin Global](https://feedsoft.ai/events/5661-china-tweaks-yuan-s-fix-to-keep-currency-stable-caixin-global.md) | -0.7% | -0.2% |
| USDCNY | 2017-01-01 | [China tweaks yuan basket to play down US dollar \| South China Morning Post](https://feedsoft.ai/events/73191-china-tweaks-yuan-basket-to-play-down-us-dollar-south-china-morning-post.md) | -0.1% | -1.0% |
| USDCNY | 2017-06-26 | [China's yuan tweaks reflect Fed fears - Nikkei Asia](https://feedsoft.ai/events/11182-china-s-yuan-tweaks-reflect-fed-fears-nikkei-asia.md) | -0.8% | -1.3% |
| USDCNY | 2020-10-23 | [Prepare for more volatility in the Chinese yuan, regulator says](https://feedsoft.ai/events/50853-prepare-for-more-volatility-in-the-chinese-yuan-regulator-says.md) | +0.5% | -1.8% |
| USDCNY | 2024-05-01 | [China Ramps Up Yuan Support as Fixing Tops Estimates by Record](https://feedsoft.ai/events/30955-china-ramps-up-yuan-support-as-fixing-tops-estimates-by-record.md) | -0.3% | +0.1% |

## Sources

- bbvaresearch.com: https://www.bbvaresearch.com/en/publicaciones/china-pboc-tweaks-model-guiding-yuan-fix-to-underpin-financial-stability/

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.