On January 2, 2025, the People's Bank of China (PBOC) set the USD/CNY reference rate at 7.1879, significantly lower than the Reuters estimate of 7.2916. This adjustment is approximately 1,000 pips stronger than market expectations. In addition, the PBOC conducted a reverse repo operation, injecting 24.8 billion yuan at an interest rate of 1.50%. The central bank also reported a net drain of 273.8 billion yuan through open market operations. On January 3, the PBOC fixed the USD/CNY reference rate at 7.1878, compared to the previous close of 7.2994, further indicating a strengthening of the yuan. The central bank injected an additional 19.3 billion yuan through reverse repos on the same day, while also draining 88.5 billion yuan in net open market operations for the week, totaling a net drain of 289.2 billion yuan.