BEIJING/SHANGHAI (Reuters) – China’s currency regulator has been conducting a rare survey of banks and companies to ask about their risk management processes and ability to handle volatility in the yuan, three banking and policy sources told Reuters.
The State Administration of Foreign Exchange (SAFE) surveyed “how companies in different sectors managed their FX exposure and how they used hedging tools”, said one of the sources, who was directly involved in the survey.
Two other sources, also directly involved, said the survey conducted this month was different from the routine quarterly questionnaire that banks submit on their proprietary trading books.
While the SAFE did not give a reason for conducting the survey, it comes at a time when market participants are bracing for some weakness in the yuan as the Federal Reserve prepares to roll back pandemic-era stimulus, potentially setting off a rise in U.S. yields and the dollar.
This survey was similar to ones done in 2014 and 2016, the sources said, with the banks being surveyed asked to provide details about how they managed companies’ expectations and how they had helped corporate clients to hedge their FX exposures.
The SAFE had not responded to Reuters’ request for comments at the time of publication of this article.
(Reporting by Xu Jing and Ryan Woo in Beijing, Winni Zhou in Shanghai; Editing by Vidya Ranganathan and Jan Harvey)
