ICYMI – China’s state banks had been within the FX market on Tuesday afternoon, intervening to prop up the yuan:
- main state-owned banks shopping for yuan and promoting US {dollars} (by swapping yuan for {dollars} within the onshore swap market, then promoting the {dollars} within the spot market)
- after Moody’s lower China’s outlook to unfavourable within the afternoon the intervention gathered tempo
The state banks take such actions below instruction from the Individuals’s Financial institution of China with a purpose to sluggish the yuan decline. Whereas state banks do have causes for buying and selling thier personal accounts and views, such apparent, co-ordinated motion is below ‘recommendation’ from the PBOC.
It seems like they’ve extra work to do:
