newsmetry
rusign inget started
macro

China to raise FX reserve ratio to slow the yuan's climb

The PBOC will lift the FX reserve requirement from 4% to 6% from November 15 to slow yuan gains. Reuters estimates $24 billion will be withdrawn from the system.

published on Newsmetry
original source published

the same feed is available to bots and dashboards through the api. connect the api →

Newsmetry newsroom

what happened

The People's Bank of China (PBOC) said on Tuesday that it will raise the foreign exchange reserve requirement ratio for financial institutions by 2 percentage points, from 4% to 6%. The change takes effect on November 15, according to a statement posted online. The central bank said the move aims to strengthen management of FX liquidity at financial institutions.

Based on official FX deposit data, Reuters calculates the adjustment will pull about $24 billion out of the financial system. Marco Sun, chief financial market analyst at MUFG (China), said the regulator is responding to strong market-driven yuan appreciation and is trying to curb expectations of one-way moves in the currency.

The decision reverses the PBOC's September 2023 cut to the same ratio, which was meant to stem rapid yuan losses and capital outflows. This year the yuan has gained more than 5% against the dollar, becoming one of Asia's best-performing currencies, supported by strong exports, large trade surpluses and heavy corporate FX conversion.

why it matters

Tighter FX liquidity reduces the supply of dollars in China's banking system, so export inflows may support the yuan less. For markets, it signals authorities do not want a rapid rise in the currency, and expectations for further gains now need to be weighed against the regulator's stance.

market impact

Yuan: PBOC measure slows appreciation, pressure on USD/CNY higher

  • Yuan (CNY) pressure down — tighter FX liquidity slows the yuan's gains against the dollar

tags

Currency

instruments

USD/CNYCNY

sources

  1. China to raise FX RRR to slow pace of yuan gains — Reuters, 3 November 2026 at 01:20 UTC

prepared by the newsmetry newsroom with ai assistance from the sources listed below. not investment advice.

alerts on your topics, the morning digest and the api — in your account.

get stories in real time ↗

related stories