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PBOC Discloses Currency Forward Positions as Yuan Stabilizes

  • Central bank held $28.9 billion in short derivatives contracts
  • Reported position seen as `surprisingly low' amid intervention
Updated on

China’s central bank revealed its short foreign-currency positions in forwards and futures for the first time, providing more clarity on the monetary authority’s efforts to shore up the yuan.

The People’s Bank of China held $28.9 billion of such positions with commercial lenders as of the end of February, which mainly reflects the currency hedging demand from domestic companies, according to a statement posted on its website. The amount is less than half of the average monthly decline of the country’s foreign reserves since August, when China made a surprise devaluation of the yuan and allowed market forces to play a bigger role in setting the exchange rate.