SHANGHAI (Reuters) - Chinese state-owned banks were seen selling dollars in the onshore foreign exchange market on Thursday, two traders said, as the yuan fell after the U.S. Federal Reserve raised the target federal funds rate for the first time since December 2015.

"Major state-owned banks were selling dollars in morning trade, as expected," said a trader at a Chinese bank in Shanghai. A second trader at a major Chinese bank also witnessed the dollar sales by state-owned banks.

State-owned banks have offered dollar liquidity regularly over the past two months in what traders believe is part of efforts to support the Chinese yuan <CNY=CFXS> from falling too fast.

(Reporting By Winni Zhou and John Ruwitch in SHANGHAI, Michelle Chen in HONG KONG; Editing by Richard Borsuk)


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