Chinese sources said that the central bank is taking steps to stabilise the yuan, directing major state-owned banks to limit US dollar purchases on Wednesday.
China’s central bank is taking steps to prevent sharp yuan declines, directing major state banks to limit US dollar purchases.
The People’s Bank of China (PBOC) issued informal guidance asking banks to avoid buying dollars for their accounts and tighten checks on client transactions.
State banks were seen selling dollars and buying yuan aggressively to slow its decline in the onshore market.
The yuan has weakened by 1.3% this month, with its offshore counterpart hitting a record low.
Despite US tariffs on Chinese exports, China’s central bank will not use yuan devaluation as a response, focusing instead on financial stability.
The yuan rebounded slightly after the news, but concerns over the trade war’s impact on China’s economy remain high.
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