China's Control of Yuan and Liquidity Stress

China's control over the daily yuan fixing has reached a level unseen for over a decade, raising concerns about a potential currency pressure buildup. The country's financial regulators are investigating a liquidity crunch that caused short-term money rates to surge to record highs. The Chinese yuan is being pressured by the biggest capital exodus since 2016, leading to a decline in the currency. The PBOC is ramping up liquidity support to the banking system to alleviate stress in the market. The yuan may see volatility during the Golden Week holiday, potentially exacerbating capital outflows.