China raises banks' FX reserve requirements for 2nd time this year

Reuters2021-12-09

BEIJING, Dec 9 (Reuters) - China's central bank said on Thursday it will raise the foreign exchange reserve requirement ratio for financial institutions by 200 basis points (bps), effective from Dec. 15.

The reserve ratio will be increased to 9% from 7%, the People's Bank of China (PBOC) said on its website, to strengthen FX liquidity management at financial institutions.

The move would force banks to set aside more of their FX deposits, which stood at $1.02 trillion at end-Nov, and markets widely believe the decision is intended to slow the yuan's recent rapid appreciation.

The yuan has risen more than 2% against the dollar since late July. In trade-weighted terms it is at its strongest since late 2015.

The PBOC previously raised the FX reserve requirement ratio for financial institutions to 7% from 5% in June to make it more expensive for banks to hold dollars.

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精彩评论

  • robot1234
    2021-12-10
    robot1234
    Too much printing of USD. The money has to go somewhere. Best is non other than China
  • PearlynCSY
    2021-12-10
    PearlynCSY
    Int'l hit money simply falls in love with RMB. The yuan has risen more than 2% against the dollar since late July. In trade-weighted terms it is at its strongest since late 2015. 
  • wywy
    2021-12-09
    wywy
    Best is not to touch on China stock now. I will give such opportunity a miss. Will hold on to some that i have. but not adding for sure[What] 
  • NPC69
    2021-12-09
    NPC69
    K
  • SC2021
    2021-12-09
    SC2021
    China
  • Valeriechan
    2021-12-09
    Valeriechan
    [Cool] 
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