MAJOR State-owned banks have swapped U.S. dollars for yuan in tenors ranging from a month to a year in the offshore forwards market in recent days, traders said yesterday, providing some support for the yuan.

The public comment period on a U.S. proposal for new tariffs on Chinese goods is set to end Thursday, after which U.S. President Donald Trump may follow through on plans to impose tariffs on US$200 billion more of Chinese imports, though it is unclear how quickly that will happen.

One trader said the State banks had been conducting the swaps since Friday.

Analysts said China’s central bank may have to decide soon whether to intervene more forcefully to support the yuan as the United States readies more sweeping tariffs on Chinese goods.

After tinkering around the edges while the yuan fell for four straight months, the People’s Bank of China recently signalled it would be uncomfortable with further declines and managed to steady the currency before it tested the 7-per-U.S. dollar level.

However, some market participants noted that the move by the big banks in offshore yuan forwards market was opposite to their operations in the onshore forwards, traders said.

(SD-Agencies)