China Raises FX Reserve Requirement to Slow Yuan Rally
China is raising the foreign exchange reserve requirement ratio by two percentage points to six percent. The central bank aims to withdraw liquidity and curb the strong appreciation of the yuan.
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China is raising the foreign exchange reserve requirement ratio by 2 percentage points to 6%, withdrawing $24B from the financial system. The policy shift targets a long rally in USD/CNH, marking one of the central bank's strongest interventions. The adjustment takes effect on November 15.
