SHANGHAI -China’s majorstate-ownedbankswereseenactivelymoppinguptheoffshoreyuanon Monday, three people with knowledge of the matter said, as thecurrencycomes under growing pressure from a darkening economic outlook and strain in the property sector.
Statebanksoften act as agents forChina’s central bank in theoffshoreforeign exchange market, but they could also trade on their own behalf or execute their clients’ orders.
Tighteningupoffshoreyuanliquidity could also act to stabilize theyuan, one of the sources said.
The move effectively raised the cost of shorting the Chineseyuan, at a time the local unit is facing mounting depreciation pressure.
Following thestatebank move, the…