PBoC to auction CNY 60B in Hong Kong to boost yuan

According to a statement from the Hong Kong Monetary Authority, the People’s Bank of China (PBoC) plans to auction CNY 60 billion of six-month bills in the Hong Kong market on January 15 to boost demand for the yuan overseas.

PBoC to auction CNY 60B in Hong Kong to boost yuan

This issuance will mark the largest since the PBoC began regular bill auctions in the city in 2018. The aim is to reduce yuan liquidity in the market, raise funding costs, and make it more expensive for traders to short the currency. Since Donald Trump's US election in November, the PBoC has actively used its daily reference rate to support yuan sentiment. Recent currency declines, driven by concerns over a sluggish Chinese economy and potential US tariff hikes, have raised doubts about the PBoC's commitment to defending the yuan.

PBoC stabilizes yuan with daily fixings, aims to curb volatility

However, the central bank has shown resolve by stabilizing the yuan through daily fixings and pledging to prevent excessive exchange rate volatility.