# Across The Border | Why the PBOC has changed the way it computes the yuan’s daily midpoint | South China Morning Post

> China changed the formula for setting the yuan's daily reference midpoint on Monday, February 20, 2017. The adjustment shortens the reference period used for the currencies in the trade-weighted basket. Some analysts see it as a technical change that brings the midpoint closer to market prices, and others as a possible first step toward a free float.

- Date: 2017-02-22 · published 2017-02-22T12:00:00.000Z
- Category: macro · region China · magnitude low
- Page: https://feedsoft.ai/events/72720-across-the-border-why-the-pboc-has-changed-the-way-it-computes-the-yuan-s-daily
- Commodities: [Chinese Yuan (CNY per USD)](https://feedsoft.ai/c/USDCNY.md)

## Why it matters

A more market-driven midpoint would make the yuan more responsive to moves in the dollar and the basket, which adds currency volatility to Chinese import costs. The change itself does not shift the level of the yuan.

## Read by commodity

- USDCNY: neutral

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| USDCNY | 2017-10-18 | [China has ‘halted intervention in yuan exchange rate market’ \| South China Morning Post](https://feedsoft.ai/events/68678-china-has-halted-intervention-in-yuan-exchange-rate-market-south-china-morning.md) | +0.2% | -0.0% |
| USDCNY | 2018-04-12 | [Analysis  \| Why devaluing the yuan is a no-no for China amid US trade war fears \| South China Morning Post](https://feedsoft.ai/events/65713-analysis-why-devaluing-the-yuan-is-a-no-no-for-china-amid-us-trade-war-fears.md) | +0.1% | +1.5% |
| USDCNY | 2017-04-10 | [Opinion \| Why PBOC’s halt in currency intervention may be temporary \| South China Morning Post](https://feedsoft.ai/events/71711-opinion-why-pboc-s-halt-in-currency-intervention-may-be-temporary-south-china.md) | -0.2% | +0.1% |
| USDCNY | 2018-01-18 | [China says yuan gains market-driven, two-way swings will be the norm \| South China Morning Post](https://feedsoft.ai/events/67199-china-says-yuan-gains-market-driven-two-way-swings-will-be-the-norm-south-china.md) | -1.1% | -1.4% |
| USDCNY | 2018-02-09 | [China says yuan no longer a one-way bet as currency slides against US dollar \| South China Morning Post](https://feedsoft.ai/events/66717-china-says-yuan-no-longer-a-one-way-bet-as-currency-slides-against-us-dollar.md) | +0.3% | +0.1% |

## Sources

- scmp.com: https://www.scmp.com/business/banking-finance/article/2072973/why-pboc-has-changed-way-it-computes-yuans-daily-midpoint

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