Customs Duty War Heats Up: Insider Sources Reveal China's New Secret Critical Move Made Under the Table!

According to multiple sources with direct knowledge of the matter, the Central Bank of China has instructed major state creditors to reduce their purchases of US dollars in order to stop the rapid decline of the yuan.

This move is Beijing's new step to prevent the sharp depreciation of its currency in an environment where economic pressures stemming from escalating trade tensions with the US have increased.

The People's Bank of China (PBOC) this week issued a directive through "window guidance," an informal policy tool used to steer market behavior without official announcements. According to three sources, state banks were told to avoid buying US dollars for their own accounts. One source added that banks were asked to implement stricter oversight when fulfilling dollar orders for clients, which was interpreted as a measure to curb speculative trading.

Today, it was observed that state-owned credit institutions intervened in the onshore foreign exchange market, sold US dollars, and purchased yuan to slow down the pace of depreciation. The onshore yuan fell about 1.3% this month to 7.35 per dollar, while the offshore yuan briefly reached a record low overnight.

Despite the pressure from U.S. tariffs and Beijing's retaliatory measures, the PBOC is resisting calls for a sharp devaluation of the yuan. Three policy advisors and a banker, who are familiar with the central bank's stance, told Reuters that any depreciation will be kept modest in order not to shake market confidence.

One of the consultants said, "There will be no sharp depreciation as it could harm market confidence, but a modest depreciation will help exports," and added: "We should also assist significant enterprises through subsidies, tax refunds, or market diversification."

The intervention indicates that the PBOC continues to prioritize financial stability while the escalating U.S. trade war, including the 104% tariff imposed by President Donald Trump on certain Chinese goods, threatens China's export-driven economy.

A weaker yuan could increase the export competitiveness of Chinese goods by lowering their prices abroad. However, analysts warn that a significant devaluation could trigger capital outflows and jeopardize financial stability.