China said to sell treasuries as dollars needed for yuan support
By Bloomberg
China has reduced its holdings of U.S. Treasuries this month to help smooth the yuan’s depreciation after the currency’s shock devaluation two weeks ago, according to people familiar with the matter.
Channels for such transactions include China selling directly, through agents in Belgium and Switzerland or some combination of the two, said one of the people, who declined to be identified as the information isn’t public. China has communicated with U.S. authorities about the sales, said another person. They didn’t reveal the size of the sales.
The People’s Bank of China has been offloading dollars to stabilize the exchange rate following the yuan’s devaluation on Aug. 11. The nation’s foreign-exchange reserves have fallen 7.9 percent in the past year to $3.65 trillion in July. The stockpile will drop by some $40 billion a month for the rest of this year because of the intervention, according to the median of 28 estimates in a Bloomberg survey conducted this month.
The PBOC and the U.S. Embassy in Beijing didn’t immediately respond to requests for comment.
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