China’s yuan is around 6.9 per cent weaker against the US dollar than it was a year ago, but the future of the currency will be ‘supported by solid underlying fundamentals’, said a newspaper affiliated with the central bank.
China's currency regulators are asking some commercial banks to reduce or postpone their purchases of U.S. dollars in order to slow the yuan's depreciation, two people with direct knowledge of the matter said. The informal instruction, or the so-called window guidance, is the latest in a series of steps taken by authorities this year to bolster a currency that has been hit by China's faltering post-pandemic economic recovery and rising yields for the U.S. dollar and other major currencies. One source said regulators were emphatic banks should hold off dollar purchases under their proprietary trading accounts due to the "recent yuan depreciation".
The onshore yuan finished the domestic trading session on Friday at the weakest close against the US dollar since December 30 amid heightened tensions between Washington and Beijing.
People’s Bank of China says in a rare warning that stabilising the foreign exchange market is a top priority after the onshore yuan closed on Wednesday at its weakest level against the US dollar since January 2008.