At the start of the week, the yuan saw a sharp rise at the open of trading thanks to the help of the country’s authorities attempting to stabilize the currency under pressure, according to Bloomberg.
Onshore yuan in mainland China jumped 0.5% trading at 7.2157 – the daily reference rate, before once again retreating.
At the same time, Chinese banks, including state-run ones, sold dollars with low liquidity which led to a rise in the rate, however sales stopped once the yuan reached the government-set level.
It be noted that last fall, the yuan similarly exhibited a similar gain at the opening of trading after regulators supported the currency by setting the daily reference rate – which usually limits the movement of the yuan in mainland China to 2% in either direction.
Beijing set the reference rate for the yuan last week. The People’s Bank of China stated that it will take comprehensive measures to stabilize expectations around the currency and decisively prevent the risk of large fluctuations in the yuan.