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MNI BRIEF: PBOC Hikes Risk RRR On FX Forwards As Yuan Weakens

MNI (Singapore)
MNI (Singapore)

China's central bank has moved to slow the weakening yuan, which has dropped to its lowest level against the U.S. dollar since May 2020.

True

The People’s Bank of China hiked the risk reserve requirement ratio on foreign exchange forward sales on Monday to curb the sharp drop in the yuan, which has fallen to its lowest level against the U.S. dollar since May 2020.

The central bank will impose a 20% risk RRR on banks selling forex in the forwards market, effective on Sep 28, in a bid to “stabilize expectations in the forex market and enhance macro prudential management”, according to the PBOC’s website.

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The People’s Bank of China hiked the risk reserve requirement ratio on foreign exchange forward sales on Monday to curb the sharp drop in the yuan, which has fallen to its lowest level against the U.S. dollar since May 2020.

The central bank will impose a 20% risk RRR on banks selling forex in the forwards market, effective on Sep 28, in a bid to “stabilize expectations in the forex market and enhance macro prudential management”, according to the PBOC’s website.

Keep reading...Show less