# China state banks buy dollars to ease sharp yuan rally, traders say

> China's major state-owned banks were reported buying U.S. dollars around 6.52 yuan on Dec 31, 2020, according to traders. The onshore yuan had opened at 6.5204 per dollar and hit a high of 6.5148, its strongest level since June 2018. The intervention was seen as an effort to slow the yuan's rally and keep it from breaching a key level.

- Date: 2020-12-31 · published 2020-12-31T12:00:00.000Z
- Category: macro · region China · magnitude low
- Page: https://feedsoft.ai/events/49863-china-state-banks-buy-dollars-to-ease-sharp-yuan-rally-traders-say
- Commodities: [Chinese Yuan (CNY per USD)](https://feedsoft.ai/c/USDCNY.md)

## Why it matters

State dollar buying dampens near-term yuan appreciation, which slightly lifts the CNY-per-USD rate and reduces the pressure on Chinese buyers' import costs for dollar-priced feed. Impact on feed prices is limited.

## Read by commodity

- USDCNY: neutral

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| USDCNY | 2018-10-30 | [Major Chinese banks seen swapping yuan for dollars in forwards: traders \| Reuters](https://feedsoft.ai/events/62767-major-chinese-banks-seen-swapping-yuan-for-dollars-in-forwards-traders-reuters.md) | -0.5% | -0.1% |
| USDCNY | 2021-03-16 | [Chinese state banks seen using FX swaps to absorb dollars, sources say](https://feedsoft.ai/events/48334-chinese-state-banks-seen-using-fx-swaps-to-absorb-dollars-sources-say.md) | +0.1% | +0.7% |
| USDCNY | 2021-11-09 | [China's yuan eases as traders await inflation data; HK dollar nears 7.8 \| Financial Post](https://feedsoft.ai/events/44271-china-s-yuan-eases-as-traders-await-inflation-data-hk-dollar-nears-7-8.md) | +0.0% | -0.7% |
| USDCNY | 2025-09-23 | [China’s Yuan Holds Firm After State Banks Step In - Finimize](https://feedsoft.ai/events/23116-china-s-yuan-holds-firm-after-state-banks-step-in-finimize.md) | +0.1% | +0.1% |
| USDCNY | 2018-08-28 | [Why China’s Yuan Will Struggle to Rally Further    - WSJ](https://feedsoft.ai/events/63745-why-china-s-yuan-will-struggle-to-rally-further-wsj.md) | +0.4% | +0.7% |

## Sources

- reuters.com: https://www.reuters.com/article/china-yuan/update-1-china-state-banks-buy-dollars-to-ease-sharp-yuan-rally-traders-say-idUSL1N2JB06X/

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.