Exclusive-China state-owned banks soak up dollars to slow yuan gains, sources say
NeutralFinancial Markets
- China’s state-owned banks are reportedly absorbing U.S. dollars to mitigate the appreciation of the yuan, a move that reflects the government's efforts to stabilize its currency amid economic pressures. This strategy comes as the country faces challenges such as a struggling housing market and low consumer confidence.
- The intervention by state-owned banks is significant as it aims to prevent excessive yuan gains that could hinder China's export competitiveness. By managing the currency's value, the government seeks to support its economic recovery and growth targets.
- This development is part of a broader context where China is targeting a GDP growth rate of 5% in 2026 to combat deflation, while also facing scrutiny over its reliance on shadow banking and the implications of its export policies on global markets.
— via World Pulse Now AI Editorial System
