A little more about that earlier Financial News in China report:

The People’s Bank of China (PBOC) is set to issue a record amount of offshore yuan bills in Hong Kong this month, aiming to stabilize the yuan amid mounting pressures. Issuing offshore yuan notes is a strategy to absorb excess liquidity in the offshore market, reducing pressure on the currency.

The move follows what is described as “strong overseas demand” for yuan bonds and comes as the (onshore) currency weakened to 7.32 to the US dollar, its lowest level since 2007.

The issuance, significantly larger than previous rounds, underscores the PBOC’s commitment to support the yuan and contain further depreciation.

The central bank also uses its daily benchmark rate tool in addition to issuing offshore bills to stabilize the yuan. The daily fix, set below 7.20 today (compared to many expecting higher than this level), shows the PBOC’s intention to slow depreciation while ensuring that onshore yuan fluctuations remain contained.

The planned issuance of offshore yuan notes, along with broader interventions by the PBOC, underscores its determination to keep the yuan in a reasonable and balanced range despite global economic uncertainty. The PBOC’s multi-pronged strategy bolsters confidence in its ability to manage exchange rate fluctuations and stabilize the yuan.

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Offshore yuan update: