China's central bank urges state banks to put a brake on dollar purchases - report

[MayReasonRule]

https://www.investing.com/news/forex-news/chinas-central-bank-urges-stateowned-banks-to-reduce-dollar-purchases-3975758

Investing.com -- China’s central bank is taking steps to limit further weakness in the yuan, instructing major state-owned banks to curb their U.S. dollar purchases and tighten scrutiny on foreign exchange transactions, Reuters reported Wedndesday, citing sources with direct knowledge of the matter.

The move comes amid growing pressure on the currency, which has fallen roughly 1.3% this month and was trading around 7.35 per dollar on Wednesday.

The offshore yuan briefly touched a record low overnight, reflecting concerns over heightened U.S.-China trade tensions following new U.S. tariffs and Beijing’s retaliatory measures.

The People’s Bank of China (PBOC) issued informal guidance—known locally as window guidance—to banks this week, asking them to avoid buying dollars for their own accounts, the report from Reuters said.

[Torchlight]

1. Beijing has been quietly, slowly, and consistently off-loading US debt

since 2017 or 18, and the trend accelerated in 2022. Between 2023 and March 2024, China sold off $100 billion in U.S. Treasuries. China's holdings of U.S. Treasury bonds have been below the $1 trillion mark since April 2022. As of December 2024, China's holdings of U.S. Treasury bonds were at $759 billion, the lowest level since 2009.

I think Mr. trump is providing them impetus to hold a fire sale for the rest of the week.

[MayReasonRule]

3. Sad But True...

[dalton99a]

2. Kick

[marble falls]

4. I believe it's true that China has the largest foreign reserve of US Dollars. The tail just might wag the dog ...

... if they were of a mind.