Chinese authorities have quietly allowed a handful of banks, including some state-backed lenders, to offer corporate clients interest rates on U.S. dollar deposits that exceed the Secured Overnight Financing Rate, currently around 3.61%, Bloomberg reported Thursday, citing people familiar with the matter who asked not to be named. By making onshore dollar deposits more attractive, the measure is designed to slow the pace at which Chinese exporters convert foreign-currency receipts into yuan — in effect, dampening the currency’s recent gains without resorting to more visible market interventions such as state bank selling or daily fixing adjustments.
The direction of the move marks a reversal from recent history. In 2023, when the yuan was weakening sharply, Chinese authorities instructed state banks to cut dollar deposit rate ceilings in successive steps — eventually down to around 2.8% — to discourage dollar hoarding and push exporters to convert more aggressively into yuan. The current action runs in the opposite direction: with the yuan gaining ground — driven in part by strong export surpluses and improving sentiment around U.S.-China trade negotiations — authorities are now using the same lever in reverse, making it more financially rewarding for corporates to park dollars onshore rather than sell them. The PBOC did not immediately comment. Total onshore foreign-currency deposits in China had stood at roughly $851 billion as of late 2025.