China's state banks act to stem yuan slide onshore and offshore: Report
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SHANGHAI: China's major state-owned banks were active in onshore and offshore foreign exchange markets this week trying to contain the yuan's slide, four people with direct knowledge of the matter said. The state banks were seen swapping yuan for US dollars in the onshore swap market before quickly selling

The state banks were seen swapping yuan for US dollars in the onshore swap market before quickly selling those dollars in the spot market to support the yuan from Wednesday to Friday, two of the sources said.

The overnight CNH Hong Kong Interbank Offered Rate benchmark (CNH HIBOR), a gauge that measures the yuan’s borrowing cost in the financial hub, jumped to 3.3562 per cent on Friday, its highest since Dec 19.

The state bank actions come as the Chinese yuan faces renewed downside pressure against a globally resurgent US dollar. The yuan has fallen to a three-week low against the dollar.

Chinese state-owned banks usually trade on behalf of the nation’s central bank in the foreign exchange market, but they could also trade on their own behalf.

In recent months, China has sought to stabilise the yuan.