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China's central bank raises FX reserve requirement to slow yuan gains

The PBOC will lift its FX reserve requirement by 2 points to 6% from Nov. 15 to curb rapid yuan appreciation, Dow Jones Newswires reports.

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what happened

The People's Bank of China has decided to raise the foreign-currency reserve requirement for financial institutions by two percentage points, bringing it to 6%. The change takes effect on November 15. The regulator is trying to temper the quick strengthening of the yuan, which hit a multi-year peak against the dollar.

According to the central bank, the aim is better management of foreign-exchange liquidity. Lenders will have to park an extra 2% of their foreign-currency deposits with the central bank, which reduces dollar supply inside China. Analyst Zhiwei Zhang of Pinpoint Asset Management, as reported by Dow Jones Newswires, said October's pace of gains likely worried policymakers, although a moderate rise may be tolerated.

why it matters

Beijing has faced pressure from trading partners to let the yuan strengthen faster, which would make Chinese exports less competitive, but policymakers favor slow, gradual appreciation. After the announcement the yuan weakened, with the offshore dollar up 0.3% at 6.6639 yuan after touching 6.6666.

market impact

Yuan and USD/CNY: tighter dollar liquidity in China slows the yuan's appreciation.

  • USD/CNY pressure up — tighter dollar liquidity in China slows yuan appreciation

tags

Currency

instruments

USD/CNYCNYDollar index

sources

  1. China's Central Bank Tweaks Forex Reserve Rules to Steady Yuan — Dow Jones Newswires, 3 November 2026 at 01:29 UTC
  2. China's Central Bank Tweaks Forex Reserve Rules to Steady Yuan — Dow Jones Newswires, 3 November 2026 at 01:44 UTC

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