Reuters
Exclusive-China’s state banks seen acquiring dollars in swaps market to stabilise yuan – sources
SHANGHAI/BEIJING (Reuters) -China’s state banks stepped up their intervention to defend a weakening yuan on Monday, with banking sources telling Reuters these banks sold a high volume of U.S. dollars and used a combination of swaps and spot trades. Six banking sources told Reuters the country’s major state-owned banks were spotted swapping yuan for U.S. dollars in the forwards market and selling those dollars in the spot market, a playbook move used by China in 2018 and 2019 as well. The selling seemed to be aimed at stabilising the yuan, with the swaps helping procure dollars as well as anchoring the price of yuan in forwards, said the sources, who have direct knowledge of market trades.
