The state banks were seen active in both the onshore and offshore markets, in an attempt to contain the yuan's slide amid a firmer dollar. The sources say that they were seen swapping yuan for the dollar in the onshore swap market before quickly selling those dollars at spot in order to bolster support for the domestic currency.
Meanwhile, the big banks were also pulling back on lending in the offshore market in order to keep liquidity conditions tighter i.e. making it more expensive to short the yuan. That said, the yuan is still down nearly 1% this week against the dollar despite the efforts but I guess this helped to prevent a much steeper decline.
