PBOC raises forex ratio to prevent sharp yuan swings

The People's Bank of China, the country's central bank, said on Tuesday it will raise the foreign exchange reserve requirement ratio by 2 percentage points to 6 percent from 4 percent, effective Nov 15, 2026.

The PBOC said the move is aimed at strengthening foreign exchange liquidity management for financial institutions.

The ratio is the share of foreign currency deposits commercial banks are required to hold as reserves. The move is seen by analysts as a bid to prevent short-term sharp fluctuations in exchange rates, following the onshore yuan strengthening to 6.64 against the dollar on Monday.