The Chinese renminbi remains under pressure admit further selloffs in Chinese equities. The PBoC is not giving in to this pressure and has fixed USD-CNY at 6.3987 this morning, below with yesterday's closing rate at 6.4041. However, USD-CNY spot is trading well above the 6.41 mark.

In the meantime, China's central bank conducted CNY150bn 7-day reverse repos this morning, compared with maturing funds of CNY120bn today. The net liquidity injection is to offset the cash withdrawal due to FX market intervention.

Offshore liquidity continues to tighten as market participants rush to the Greenback. The one-week implied CNH rate climbed to 22% yesterday, a record high, notes Commerzbank. In general, the market remains in panic mode especially after the global stock sell-off and still sees strong weakening bias in CNY exchange rate.