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SHANGHAI/BEIJING – Major Chinese state-owned banks sold U.S. dollars in both onshore and offshore markets in late trade on Tuesday to prop up the weakening yuan, two sources with direct knowledge of the matter told Reuters.
Such dollar selling comes as the Chinese currency is facing mounting downside pressure, with the onshore yuan hitting the weakest level since December 2007 and the value of yuan against currencies of its major trading partners at a five-month low.
The selling of dollars by state banks in early U.S. trading hours lifted the yuan, said one of the sources, noting the action took place in both onshore and offshore markets.
The other source also spotted such state bank dollar selling in the onshore market late in the Asian day.
