BEIJING—China is likely to use its vast currency reserves to stop any precipitous fall through the psychologically important level of 7 yuan per dollar as it could risk triggering speculation and heavy capital outflows, policy insiders said.
On Oct. 26, the yuan hit a fresh 22-month low of 6.9647 against the dollar, and traders expected that the tightly managed, partially convertible currency would soon be testing 7 per dollar, a level unseen since the global financial crisis a decade ago.
