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PBoC raises banks' FX reserve requirement ratio by 2 points to 6%, effective Nov. 15
What happened
The People's Bank of China said Tuesday morning it will raise the foreign-exchange reserve requirement ratio for financial institutions by 2 percentage points, to 6%, effective November 15, aiming to improve management of FX liquidity. The yuan weakened against the dollar after the announcement, and the decision landed while oil markets and Asian equities stayed cautious over Middle East developments and the U.S. midterm elections.
Why it matters & what’s next are part of Pro, along with the audio summary.
Start your free 14-day trialWho’s affected
- US equities broadly (risk sentiment, dollar moves)
- Yuan-sensitive multinationals and emerging-market FX (USD/CNY) as the move tightens the cost of holding dollars for Chinese banks
Sources