Business News Asia
Major Chinese state-owned banks sold the U.S. dollar both internationally and domestically on Tuesday (Oct. 25) to support the weakening of the yuan, sources said.
The dollar’s sell-off came as the yuan came under increasing downward pressure and the domestic yuan fell to its lowest level since December 2007. The value of the yuan against its major trading partners hit a five-month low.
According to the source, it is not uncommon for a major Chinese bank to trade foreign exchange in the local market during trading hours in London or New York. However, these banks usually manipulate the yuan in the international market to support the yuan in the Chinese market.
The foreign exchange yuan has reached record lows in recent days. This is due to a stronger dollar and concerns about a slowdown in the Chinese economy.
The Chinese state bank’s yuan purchases helped the yuan recover from a record low of 7.3746 per dollar to 7.3034 per dollar.