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Yuan Tumble Tests China’s Free-Market Resolve as PBOC Intervenes

Bloomberg business news

Yuan Tumble Tests China’s Free-Market Resolve

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The yuan sank for a second day, spurring China’s central bank to intervene as the biggest rout since 1994 tested the government’s resolve to give market forces more sway in determining the exchange rate.

The currency slid as much as 2 percent to a four-year low of 6.4510 per dollar in Shanghai, before recouping about half its loss in the final 15 minutes of trading. While the People’s Bank of China followed through on a pledge to align its fixing more closely with the market rate, people familiar with the matter said authorities intervened to support the currency and told banks to limit some companies’ dollar purchases.