China’s central bank has surveyed some foreign banks in the past week about the interest rates they offer to their clients for dollar deposits, people familiar with the matter said, as authorities step up efforts to slow the yuan’s depreciation.
The central bank also guided one commercial lender to lower such rates, one of the sources said, as recent weakness in the Chinese currency prompts authorities to more closely scrutinize foreign exchange dealings. But the source did not offer more details.
The move could potentially nudge companies, especially exporters, to convert more of their foreign exchange receipts into the yuan, which has weakened to near eight-month lows and lost nearly 5 per cent so far this year.
Total FX deposits in China stood at $851.8 billion at end-May, data shows.
The People's Bank of China did not immediately respond to Reuters request for comments.
The PBOC said in mid-May that authorities will resolutely curb large fluctuations in the exchange rate and study the strengthening of self-regulation of dollar deposits.
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