China's commerce ministry surveyed companies on impact from weaker yuan - sources

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BEIJING/SHANGHAI/SINGAPORE : China's commerce ministry has been asking exporters, importers and banks about their currency strategies lately and how a weakening yuan could affect their businesses, three sources who were part of the survey told Reuters.The survey, conducted in May, coincided with data show

BEIJING/SHANGHAI/SINGAPORE : China's commerce ministry has been asking exporters, importers and banks about their currency strategies lately and how a weakening yuan could affect their businesses, three sources who were part of the survey told Reuters.

The Ministry of Commerce did not immediately respond to Reuters request for comments, but their interest underscores authorities' attention to the pressure on the yuan. Corporate dollar hoarding has contributed to the softness. Official data showed China's FX deposits swelled $28 billion to $881.9 billion in the four months to April and the average FX settlement ratio, which measures conversion of export receipts to yuan, was the lowest in nearly three years at 65.8 per cent.

China's central bank said last month that it will resolutely curb large fluctuations in the exchange rate and study the strengthening of self-regulation of dollar deposits. Some market watchers suspect the regulator could set a cap on dollar deposit rates, a move that could encourage companies to liquidate their dollar positions to ease downside pressure on the yuan.

 

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