SHANGHAI, July 20 (Reuters) – China’s major state-owned banks were observed engaging in dollar selling in the offshore spot market during early Asian trades on Thursday, as reported by two individuals with direct knowledge of the situation. The purpose of this state bank dollar selling was to mitigate the speed of yuan depreciation, according to one of the sources. Additionally, China’s central bank announced a relaxation of a cross-border financing rule on Thursday, which will facilitate domestic firms in raising funds from overseas markets and alleviate the pressure of yuan depreciation. The offshore yuan experienced a gain of over 0.7%, reaching a high of 7.1812 per dollar before settling at 7.1890 as of 0249 GMT. Similarly, the onshore market witnessed a similar upward rebound, although the yuan remains down approximately 4% against the dollar year-to-date, positioning it as one of the weakest performing Asian currencies for 2023.
Reporting by Shanghai Newsroom
Editing by Shri NavaratnamOur Standards: The Thomson Reuters Trust Principles.
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