China’s central bank has asked domestic lenders to scale back outward bond investments according to two sources with direct knowledge of the matter, the latest in series of increasingly strong steps to support the yuan.
The directive, issued this week, is for banks to restrict southbound purchases under the Bond Connect scheme, and is aimed at limiting the supply of yuan offshore, the sources said.
The sources spoke on condition of anonymity as they were not authorised to talk to the media. The PBOC declined to comment on the content of the window guidance.
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