© Reuters. Chinese Yuan and U.S. greenback banknotes are seen on this illustration taken March 10, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
SHANGHAI (Reuters) – China’s main state-owned banks have been seen exchanging yuan for U.S. {dollars} within the onshore swap market and promoting these {dollars} in spot foreign money markets this week, two sources informed Reuters on Tuesday.
The yuan has gained 2% previously week, to face at ranges round 7.13 to the greenback – its highest in practically 4 months – and the massive state banks have continued to promote {dollars} for yuan this week, the sources mentioned.
State banks are sometimes suspected of moving into the foreign money market on behalf of the authorities, however the timing is uncommon as they’d often promote {dollars} when the yuan is beneath stress to depreciate.
Their motion over the previous week got here amid broad greenback weak spot, main sellers to suspect the purpose was to speed up the yuan’s restoration.
