China's yuan is sliding and market participants suspect authorities are deliberately but slowly engineering a light depreciation of the currency, both to complement an easy monetary policy and to support exports. While the yuan has declined roughly 2% this year against the dollar, it has become relatively less competitive as Japan's yen and currencies of other neighbours South Korea, Thailand and Taiwan drop more sharply. The People's Bank of China (PBOC) also appears to have loosened its grip on the yuan, allowing it to fall to the weak side of the 7.2-per-dollar level that state-owned banks had staunchly defended in the past, though it has continued to lend some support through stronger-than-expected settings of the daily mid-point for the currency.
This quasi-public institution acts as central bank for the United States of America. This means that it regulates the banks, by setting reserve requirem.
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State banks often act on behalf of China's central bank in the foreign exchange market, but they could also trade on their own behalf or execute clients' orders. One of the people said the selling was "very forceful" to defend the yuan at around 7.1820 per dollar in the onshore spot market. The state bank actions come as the yuan faces renewed downside pressure from foreigners' rush out of China's sinking equity markets and a globally resurgent U.S. dollar.
Foreign investors have expressed interest in privatising the currently state-owned Ukrainian banks Ukrgasbank and Sense Bank. Source: Yurii Drahanchuk, the Deputy Minister of Finance, in a comment to Ekonomichna Pravda.