People's Bank of China bolsters Yuan for fifth consecutive day today via its fix, most probably in an attempt to keep it balanced against Dollar and against basket of currencies. Yuan's movement just few weeks back, might have spooked that Chinese government, when Yuan dropped to lowest level in 5 years and spread between offshore and onshore counterpart widened to record More 2%.Today, People's Bank of China strengthen fix by 0.01% to Yuan 6.5528 per Dollar.
Latest movement in Yuan indicates that People's Bank of China might be micro-managing the currency. In last nine trading days USD/CNY has lurked from 6.587 to 6.552/$.
It has taken other steps to curb excessive shorting of Yuan, especially in Hong Kong market. It is regularly draining monetization from that market via state run banks and requested information on transactions and activity of speculators and to restrict lending.
China's state run media has also taken fire and swords to speculators, even of a well known billionaire investor Mr. George Soros, known as man who broke Bank of England.
People's Bank of China's efforts however had little impact on offshore Yuan for past five days, which is not that volatile anymore but spread is again rising from parity.
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