China tightens control to restrain currency's rise
ABC News
China’s central bank is trying to restrain the rise of the yuan after the currency hit a 2 1/2-year high against the dollar
BEIJING -- China’s central bank is trying to restrain the rise of the yuan after the currency hit a 2 1/2-year high against the dollar.
Commercial banks were ordered Thursday to increase the amount of their foreign currency deposits that are held as reserves for the second time this year. That reduces the amount available for trading, making it easier for Beijing to manage the exchange rate.
The People’s Bank of China is trying to make the yuan’s state-set exchange rate more flexible and market-oriented but has intervened over the past year to restrain its rise. Those controls are an irritant in relations with Washington, which complains that a weak yuan makes China's exports improperly cheap and swells its multibillion-dollar trade surplus.
The yuan has gained a modest 2% against the dollar since mid-August, but that was enough to boost it to 6.3762 to the dollar this week, its highest level since May 2018. That makes one yuan worth about 15.7 cents.
