The State Administration of Foreign Exchange (SAFE), China’s currency regulator, has been carrying out a rare survey of banks and companies, asking about their ability to deal with volatility in the yuan and their risk management processes, according to three banking and policy sources who spoke to Reuters.
The SAFE surveyed “how companies in different sectors managed their FX exposure and how they used hedging tools”, said one of the sources, who was directly involved in the survey, told Reuters.
The regulator did not give a reason for the survey, but its timing suggests Chinese authorities are girding for currency volatility as the Federal Reserve and other major central banks wean economies off massive pandemic-era stimulus, and are keen to avoid a repeat of the violent yuan slide during US tightening in 2015-2016.
Two other sources, also directly involved, told Reuters that the survey conducted this month was different from the routine quarterly questionnaire that banks submit on their proprietary trading books.
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