How China supports the yuan while burning FX reserves more slowly

How a central bank supports a currency? One was is through intervention (buying the currency supports it, selling it if they want it to fall).

But ... the People’s Bank of China has burned though forex reserves supporting the yuan, so they're now trying different methods

• PBOC & local lenders increased their holdings in onshore forwards to $67.9 billion in August, positions that would boost China's currency against the dollar
• The amount is five times more than the average in the first seven months
• The positions are part of a three-stage process to support the currency without immediately draining reserves, according to China Merchants Bank Co. and Goldman Sachs Group Inc.
• "If you can intervene without actually diminishing your reserves, it's somehow viewed as better," said Steven Englander, global head of Group-of-10 foreign exchange-strategy in New York at Citigroup Inc. Such central-bank activity "may not look quite as dramatic as the sale of reserves, and they may prefer that optically," he said.

More here, makes for some interesting reading on a quiet Asian session