Economic Buzz: China Central Bank Takes Measures To Protect Yuans Depreciation

27 Sep 2022 , 11:48 AM

Chinas central bank ramped up measures to safeguard the yuan from further depreciation on Monday as the U.S. Dollar continued to strengthen on the Federal Reserves tightening stance. The Peoples Bank of China decided to raise the risk reserve requirement for banks forward forex sales to 20 percent from zero. The new rate will take effect on September 28. This foreign exchange risk reserves for financial institutions when buying forex through currency forwards were lowered to zero in October 2020. The PBoC had set the central parity rate of the renminbi at 7.0298 per dollar on Monday, the weakest since mid-2020. The currency is allowed to move within the range of 2 percent above or below the central parity each trading day in the spot market. Powered by Commodity Insights