PBOC bills the move as a countercyclical tweak, market watchers not convinced

Chinese leaders revealed a 'countercyclical' measure to its currency-management model in something that it said will prevent big swings.

The move is a step backwards from pledges to allow the currency to be driven by market forces.

It's not likely to draw the ire of Washington because the problem for the PBOC right now is yuan weakness. The new measures are most likely to be used to prop up the currency.

The announcement today didn't include details on how the measures will work.

Over the past two days, the USD dollar has dropped against the yuan.

"The buy orders from these banks were quite huge," a Shanghai-based senior trader at a midsize domestic bank Friday told the WSJ. "People are really in a panic right now because we all suspect that it's our government trying to teach Moody's a lesson but nobody knows how far the PBOC will go."