PBOC Acts to Curb Yuan Strength by Cutting Forex Costs
The PBOC removed reserve requirements for forex forwards to curb yuan gains. This move signals a desire for stability as the currency reaches a three-year high.
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The Chinese yuan is surging against the United States dollar, bolstered by strong export performance and a weakening greenback. After recording a 4.4% gain in 2025—its largest annual increase since 2020—the currency has climbed approximately 2% so far in 2026, reaching levels near three-year highs. In response, the central bank of China has initiated measures to moderate the pace of appreciation for the USD/CNY pair.
