China Takes Action to Bolster Yuan Amid Stock Market Turmoil - Exclusive Sources

China's major state-owned banks took action to support the yuan by tightening liquidity in the offshore foreign exchange market and actively selling U.S. dollars onshore as equities experienced a significant drop. The move aimed to prevent the yuan from depreciating too rapidly amidst a plunge in China's A shares. Overseas funds have sold approximately $1.6 billion in Chinese equities this year, reflecting weakened investor confidence due to signs of economic slowdown. State banks' actions led to tighter offshore yuan liquidity and increased costs for shorting the currency, while aggressive spot dollar selling defended the 7.2 per dollar level.