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China Seeks to Curb Relentless Yuan Gains With Surprise Fix

  • Beijing has signaled wariness over yuan appreciation
  • PBOC earlier told banks to hold more foreign currency
Updated on

China’s central bank took further steps to limit the yuan’s strength, a day after policy makers made their most substantial move yet to rein in the currency’s surge against the dollar.

The People’s Bank of China set its daily yuan fixing at the weakest relative to estimates since Bloomberg began publishing the forecasts in 2018. The fixing came hours after the PBOC told banks to hold more foreign exchange in reserve, a move that effectively reduces the supply of dollars and other currencies onshore and puts pressure on the yuan to weaken. Still, it continued to strengthen in onshore and offshore markets on Friday.