China’s state banks selling dollars offshore to slow yuan declines, sources say


China’s major state-owned banks were seen selling dollars to buy yuan in the offshore spot market in early Asian trades on Thursday, two people with direct knowledge of the matter said.

Such state bank dollar selling was meant to slow the pace of yuan declines, one of the sources said.

China’s central bank on Thursday also announced a relaxing of a cross-border financing rule, making it easier for domestic firms to raise funds from overseas markets and easing depreciation pressure on the yuan currency.

China’s offshore yuan strengthened more than 0.7% to a high of 7.1812 per dollar before last trading at 7.1890 as of 0249 GMT.

In the onshore market , the yuan followed a similar upward bounce, but it is still down about 4% against the dollar year-to-date, making it one of the worst performing Asian currencies for 2023.

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