Officials from the State Administration of Foreign Exchange (SAFE) privately communicated to foreign exchange brokers on Wednesday of last week a relaxation of informal transaction limits in the Chinese interbank market due to the Fed raising interest rates by 0.75 percentage point, the Financial Times reported, citing two people familiar with the matter.
The news also mentions that the renminbi’s sharp decline over the past week began after regulators told traders they were relaxing foreign currency trading limits.
The report, which quotes one of the people, says the relaxation measure was taken because policymakers “believed it was the right time to let the renminbi depreciate a bit“.
Source: Fx Street
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