25-7-2023 (BEIJING) In early Asian trade on Tuesday, China’s major state-owned banks were observed selling U.S. dollars to purchase yuan in both onshore and offshore spot markets, according to three sources with direct knowledge of the matter. This move is aimed at bolstering the Chinese currency.
The decision to sell U.S. dollars and acquire yuan comes after China’s top leaders announced on Monday their commitment to provide increased policy support for the economy in the aftermath of the COVID-19 pandemic. The focus is on stimulating domestic demand and implementing further stimulus measures.
Policymakers also stated their intention to maintain the yuan exchange rate at reasonably stable and balanced levels, pledging to revitalize the capital market and restore investor confidence.
As a result, the onshore yuan displayed a gain of over 0.4 per cent, reaching a high of 7.1550 per dollar before settling at 7.1623 as of 0223 GMT. Similarly, its offshore counterpart surged to a week high of 7.1475 before ultimately trading at 7.1629.
