The People’s Bank of China said on Wednesday that it’s selling more yuan-denominated bills in Hong Kong, which should tighten yuan’s liquidity in the offshore market and raise cost for shorting the currency.
The central bank will sell 30 billion yuan ($4.35 billion) worth of bills in Hong Kong on June 26, through 20 billion yuan of one-month bills and 10 billion yuan of six-month bills, according to a statement.
The sale would be the biggest since PBOC issued the first bills of this kind in Hong Kong in November. The central bank has performed similar issuances three times before, to a total amount of 60 billion yuan.
The yuan has fallen sharply against the dollar since April and is now hovering close to the key psychological barrier of 7 yuan per dollar.