(WSJ) BEIJING—China intervened to prop up the yuan Wednesday, according to people familiar with the matter, just a day after it had let it decline sharply, underscoring the tricky balancing act now facing its central bank: how to keep the country’s currency from free-falling.
The intervention in Wednesday’s final moments of trading came after the yuan had weakened nearly 2%—the maximum allowed in mainland China—to where $1 would buy about 6.45 yuan, its lowest level against the U.S. currency in four years.
Tuesday, the People’s Bank of China surprised global markets with what looked like a win-win currency depreciation for the country—appearing to cede more control of its exchange rate to market forces, which the International Monetary Fund and others have long urged it to do, while also helping Chinese exporters.
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