Yuan Gains as State-Run Banks Sell Dollars, Stimulus Bets Recede
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China’s yuan advanced for a second day on speculation state-owned banks sold dollars to support the local currency and as concerns the authorities will implement quantitative easing receded.
State-run banks sold the greenback to bolster the yuan, two traders said, asking not to be named. The People’s Bank of China has sufficient tools to keep cash supply at reasonable levels and doesn’t need to inject funds by purchasing local government debt, the central bank research bureau’s Ma Jun was cited as saying by China Business News. The monetary authority raised the yuan’s daily reference rate for the fifth day, the longest stretch of increases since December.