China is panicking over its weakening currency, and is ordering its state-owned banks to prepare to sell dollars and buy yuan in an effort to put a floor under the currency.

The scale of this latest effort to prop up the yuan will be big and could provide a floor to the Chinese currency, according to the report.

The amount of dollars to be sold hasn't been decided yet, but Reuters said it will primarily involve the state banks' currency reserves. Their offshore branches, including those based in Hong Kong, New York and London, were ordered to review offshore yuan holdings and check to see that dollar reserves are ready. 

As a defense of the currency, however, such tactics are invariably doomed to failure. China can sell dollars and buy yuan, but neither the buying nor the selling will change the fundamentals which are pushing the yuan down against the dollar. Once their dollar reserves are exhausted the currency depreciation will likely continue.