China’s currency regulator has reportedly conducted an unusual survey on risk management at banks and companies as well as their ability to handle yuan volatility.
The State Administration of Foreign Exchange (SAFE) surveyed «how companies in different sectors managed their FX exposure and how they used hedging tools,» according to a «Reuters» report citing unnamed sources.
The survey conducted this month was different from the routine quarterly questionnaire submitted by banks on their proprietary trading books, sources added.
Global Tightening
The timing of the SAFE survey suggests potential preparation for FX volatility as the Federal Reserve and other major central banks ready to taper coronavirus-linked stimulus.
According to the report, the recent survey, which includes inquiries about how to manage expectations and help corporate clients with FX hedging, was similar to the ones done in 2014 and 2016 – the last time the yuan experienced serious turbulence during U.S. tightening and lost nearly 13 percent against the dollar in two years.
