Chinese State Banks Defend Yuan as Stock Markets Slide

Major Chinese state banks defend yuan against sinking equity markets and resurging US dollar

State-owned banks in China were reportedly heavy sellers of dollars on Wednesday, working to stabilize the yuan as it faced downward pressure due to the country’s struggling economy. Although state banks typically act on behalf of the central bank in the foreign exchange market, they also have the ability to trade on their own or execute orders for clients. Sources with direct knowledge of the situation described the selling as “very forceful,” as the banks aimed to defend the yuan at around 7.1820 per dollar in the onshore spot market.