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China’s major state-owned banks are reportedly buying US dollars to limit yuan appreciation, Reuters reports, citing two traders familiar with the operations.

They said that the Chinese banks are buying dollars in the onshore spot market during late-night trading sessions.

Also, the state-owned banks are said to be “swapping dollars for yuan in the swap market this week i.e. causing the yuan to fall in the forward market, and making yuan borrowings more expensive.”

USD/CNY drops 0.30%

In light of the intervention, USD/CNY drops to 6.7064, shedding 0.325 on the day.