China’s banking and insurance regulator said on Saturday it did not expect a persistent decline in the yuan and warned speculative short sellers they would suffer “heavy losses” if they bet against the currency. The yuan has lost more than 2.5 per cent against the dollar since the festering China-US trade
China’s central bank (CB) will use foreign exchange intervention and monetary policy tools to stop the yuan weakening past the key 7-per-dollar level in the near-term, three people familiar with the central bank’s thinking said. “At present, rest assured they will certainly not let it break 7,” a source told Reuters.
China has ample policy tools to cope with yuan fluctuations and the country is able to keep the currency basically stable, a central bank vice governor said in remarks published on Thursday. The yuan fell against the dollar on Thursday to its lowest level in almost six months
China’s banks extended new yuan loans in August as policymakers ratcheted up support for the slowing economy, and further policy easing is expected in coming weeks as the Sino-US trade dispute takes a bigger toll on the economy.
China’s yuan fell to an 11-year low against the dollar on Monday and stocks dropped as the Sino-US trade war sharply escalated, threatening to inflict more damage on the world’s largest economies.