China Intervenes to Support Yuan

China intervened in the foreign exchange markets in final minutes of trading Wednesday to prevent an excessive fall in the value of the yuan, The Wall Street Journal reported Wednesday.

China first intervened in the currency markets on Tuesday, when it unveiled a commitment to set the yuan’s daily fixings according to the previous day’s closing spot prices and market-moves of other major currencies. The move sent the Chinese currency dropping more than 2 percent to its lowest level against the dollar in nearly four years.

However, sources told the Journal that following further precipitous declines in the yuan on Wednesday, the Peoples Bank of China then told state-owned banks to sell dollars on its behalf in the last 15 minutes of Wednesday’s trading, causing the yuan to jump about 1 percent against the greenback.

CNBC

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