China Banks To Stagger USD Purchases - Reuters

(MNI Australia) Headlines have crossed from Reuters that the PBoC has asked some China banks to hold off on USD purchases in the interbank market. Purchases reportedly will take place when net exposure of the banks (in the FX market) hits a certain level.

• Reuters note: "The move would effectively mean some of the heavy dollar purchases by companies would be absorbed by banks and sit on their books for a while, thus partially reducing downward pressure on the sliding yuan."
• Banks were also reportedly told "companies requiring to purchase $50 million or more will need to seek the central bank's approval, Reuters reported."
• The directive came earlier in the week, which likely followed PBoC's FX market mechanism meeting. Headlines came out after this whereby the PBCO stated it would curb one-sided depreciation pressures in the market.