summarize the following:

Chinese regulators are stepping up scrutiny of currency trading and cross-border capital flows, according to people familiar with the matter, as the yuan slides to the weakest level in seven months.

The People’s Bank of China and the foreign-exchange regulator have asked exporters, importers and banks about money flows and hedging demand, while seeking views on the yuan and trading sentiment, said the people who asked not to be identified discussing private information.

The State Administration of Foreign Exchange had also asked for suggestions to stabilize the currency, with a submission deadline of just a few days, one of the people said.

China has signaled discomfort with the yuan’s pace of decline as it fell to the lowest level since November against the dollar. The PBOC pledged to curb speculation last month and used its daily reference rate to push back this week, though a dovish monetary policy that contrasts with rising global interest rates and weaker-than-expected growth are fueling pressure on the currency.

“From our surveys, the nation’s foreign-exchange market expectation is stable overall,” SAFE said in a reply to Bloomberg’s query. Trading activities have remained reasonable, while major participants including banks and corporates are gradually adapting to two-way fluctuations in exchange rates, it said.

The number of surveys, which accelerated in the past two months, is in excess of prior years, the people said. It’s unclear if the increased frequency reflects growing concern over the yuan’s slide or is due to a broader push from Beijing earlier this year for government agencies to conduct more research to aid in policy formulation.

The yuan has fallen almost 5% against the dollar this year, making it the third worst-performer in Asia. The currency fell on Thursday to a fresh 2023 low of 7.2769 per dollar in offshore trading after strong US economic data bolstered the case for two additional quarter-point Fed hikes by the end of the year.

Foreign funds cut their holdings of China’s sovereign bonds for the first four months of 2023, and there are also signs that Chinese investors are shifting more money into overseas assets, according to data compiled by Bloomberg.

Unfriendly to Yuan

“The current environment is not friendly to the yuan,” said He Wei, China economist at research institute Gavekal Dragonomics based in Beijing. “Now is the period with the lowest confidence during weak economic growth in the second quarter.”

The surveys were conducted through face-to-face meetings, via phone calls and emails, said the people. The authorities asked for details on cross-border payments and financing, as well as plans by companies to hold dollars, the people said.

Back in May, the PBOC and SAFE said they will strengthen market guidance and act against one-way currency bets, spurring a temporary bounce in the yuan. The central bank set a stronger-than-expected reference rate for a third time this week on Thursday, and state-owned banks have been seen selling dollars to support the yuan.

While China has other tools — such as lowering reserve requirement ratio for foreign currency deposits — to bolster the currency, it has yet to use them.

The expectations from participants are that the foreign exchange market will be supported with the implementation of government policies, and an improvement in the economy, SAFE also said.