Home » Chinese state banks sold dollars to support yuan late on Tuesday – sources

Chinese state banks sold dollars to support yuan late on Tuesday – sources

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SHANGHAI/BEIJING (Reuters) – China’s big state-owned banks on Thursday sold US dollars in both onshore and offshore markets to support a weaker yuan.

Such dollar selling comes at a time when the renminbi faces mounting downward pressure, with the onshore renminbi hitting its lowest level since December 2007 and weakening the renminbi against the currencies of major trading partners. The value is at a five-month low.

The yuan rose after state banks sold the dollar early in U.S. trading hours, one of the sources said.

Another source also spotted a state bank dollar sell-off in the onshore market later in Asian time.

According to sources, it is unusual for domestic branches of major Chinese banks to actively engage in onshore trading during London or New York trading hours. It is said that he is manipulating

The offshore renminbi has hit record lows in consecutive sessions in recent sessions, reflecting a strong dollar and fears of a slowdown in China’s economy.

RMB purchases by state-owned banks fell from a record low of 7.3746 to 7.3034 to the dollar.

The onshore renminbi rebounded from the 7.31 low, recovering almost all of its intraday losses following the state bank’s action. When trading resumed on Wednesday, it opened at 7.2949 per dollar and last traded at 7.2971 at 0229 GMT.

China’s state-owned banks typically trade in the foreign exchange market on behalf of the People’s Bank of China, but they can also trade independently and execute orders on behalf of corporate clients.

Chinese regulators have been busy rolling out measures to stem a sharp depreciation of the yuan.They are parameter on cross-border corporate lending to make it easier for domestic companies to raise capital from overseas markets on Tuesday.

And sources told Reuters that foreign exchange regulators asked them about them positioning in the currency market.

Reported by newsrooms in Shanghai and Beijing. Editing by Vidya Ranganathan and Kim Coghill

Our criteria: Thomson Reuters Trust Principles.

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