The report says that the Chinese central bank has asked major state-owned banks to be prepared to sell dollars in exchange for the local currency in offshore markets in an effort to arrest the yuan's recent slide. The state banks were told to review their holdings in the offshore yuan at their offshore brnaches, and to ensure that US dollar reserves are ready to be deployed.
One of the sources cited said that the scale of this round of dollar selling in order to defend the yuan will be rather big. For some context, this comes as USD/CNH has run up to hit 7.20 in trading this week with the yuan itself set for its biggest annual loss against the dollar since 1994.
