The People's Bank of China (PBOC) has been showing signs that it is not a promoter of the Yuan depreciation, apparently asking Chinese state-owned banks to sell dollars on its' behalf to restrain the currency's fall. But as the Chinese government is enjoying the rise in export, sources say it is pushing the Yuan to plunge even lower.
"Looking at the international and domestic economic situation, currently there is no basis for a sustained depreciation trend for the yuan," the People's Bank of China (PBOC) said. After the yuan slid further in early in Wednesday trade currency dealers said Chinese state-owned banks were seen selling dollars on behalf of the PBOC to restrain the yuan's fall, and the spot market rate recovered late in the day to close 6.3870, a rate which will influence Thursday's setting. "Apparently, the central bank does not want the yuan to run out of control," said a trader at a European bank in Shanghai.