The informal instruction, or the so-called window guidance, was meant to slow the pace of yuan depreciation, the sources said.
China’s yuan has lost 3.6% against the dollar to 7.16 per dollar, becoming one of the worst performing Asian currencies. [CNY/]
Following is a list of policy moves and measures to stem yuan weakness after the local currency weakened past the closely watched 7-per-dollar level in May:
** Aug 1, 2023
The People’s Bank of China (PBOC) continued its weeks-long trend of setting the yuan midpoint firmer than market projections, seen by investors as a sign of the authorities’ growing discomfort over recent yuan weakness.
** July 25, 2023
China’s major state-owned banks were seen selling U.S. dollars to buy yuan in both onshore and offshore spot markets in early Asian trade, sources with direct knowledge of the matter said.
** July 20, 2023
China’s major state-owned banks were seen selling dollars to buy yuan in the offshore spot market in early Asian trades, sources with direct knowledge of the matter said.
** July 20, 2023
China’s central bank and foreign exchange regulator raised the cross-border macro prudential adjustment ratio for corporates and financial institutions to 1.5 from 1.25, making it easier for domestic firms to raise funds from overseas markets.
** July 5, 2023
Financial News, a publication backed by the PBOC, said in a commentary that foreign investors were net purchasers of onshore yuan bonds in June, and expectations in China’s foreign exchange market remain stable and cross-border capital flows are basically balanced.
** July 4, 2023
China’s major state-owned banks lowered their dollar deposit rates for the second time in a month, sources with direct knowledge of the matter said, as authorities stepped up efforts to arrest a slide in the yuan.
** June 29, 2023
China’s major state-owned banks were seen selling dollars for yuan in the onshore spot foreign exchange market, sources with knowledge of the matter said.
** June 27, 2023
China’s major state-owned banks were seen selling dollars in the offshore spot foreign exchange market, sources with knowledge of the matter said, suggesting authorities wanted to slow the pace of the yuan’s recent slide.
** June 6, 2023
A Chinese self-regulatory body overseen by the central bank asked major state-owned banks to lower the dollar deposit interest rates, sources with direct knowledge of the matter said, in a bid to shore up the weakening yuan currency.
** June 1, 2023
China’s commerce ministry asked exporters, importers and banks about their currency strategies and how a weakening yuan could affect their businesses, sources who were part of the survey told Reuters.
** May 26, 2023
China’s major state-owned banks were seen selling dollars in the onshore spot foreign exchange market on two days, sources with knowledge of the matter told Reuters.
** May 24, 2023
The yuan is unlikely to experience sharp volatility as China’s economic fundamentals, balance of payments and foreign exchange reserves are generally stable, the state-run Economic Daily said.
** May 19, 2023
China will resolutely curb large fluctuations in the exchange rate and study the strengthening of self-regulation of dollar deposits, the central bank said.
It said that it will guide expectations, correct pro-cyclical and one-sided behaviour when necessary, and curb speculation.
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