Chinese state-owned banks sold dollars in the onshore foreign exchange market on Thursday, five traders said, pushing the yuan to its strongest level in nearly two months. “Major state-owned banks were selling dollars in the market,” said a trader at a Chinese bank in Shanghai.
A second trader at a major Chinese bank also said he saw sales by state-owned banks.
The yuan suddenly strengthened nearly 200 pips to a high of 6.8690 per dollar at 0252 GMT, the strongest intraday level since March 27.
It traded at 6.8760 per dollar as of 0346 GMT.
State-owned banks have sold dollars in the forex market regularly since late last year in what some traders believe is part of official efforts to prop up the Chinese currency.