China’s central bank has instructed major state-owned banks to reduce U.S. dollar purchases in an effort to stabilize the yuan amid downward pressure. This directive comes as the yuan faces challenges following U.S. tariffs on Chinese exports and retaliatory actions by Beijing. The People’s Bank of China (PBOC) communicated this informal guidance to state banks, asking them to limit dollar purchases for proprietary accounts. Additionally, big banks were advised to enhance checks when executing dollar purchase orders for clients, interpreted by markets as a move to curb speculative trades. The onshore yuan rebounded slightly after reports of these measures, indicating the central bank’s focus on maintaining stability in financial markets despite trade war challenges. — new from Reuters
