China steps in on the yuan’s appreciation
|There is a focus on the yuan in trade today as it noted that China's currency has surged 13% against the dollar since last May and the People's Bank of China is showing a sign that there are not comfortable with it.
Following yesterday's strongest fix of USD/CNY since May 17 2018, China has also forced banks to hold more foreign currencies in reserve for the first time in more than a decade, as Bloomberg reports as its most substantial move yet to rein the surging yuan.
The report explains that Chinese financial institutions will need to hold 2% more of their foreign exchange in reserve from June 15, taking it to 7%, according to a central bank statement Monday.
''The move, which the People’s Bank of China said will help liquidity management, effectively reduces the supply of dollars and other currencies onshore, putting pressure on the yuan to weaken,'' Bloomberg wrote.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.