China raises banks' FX reserve ratio to 6% to slow the yuan's rise

What was announced. The PBOC notice is one sentence: to strengthen the FX liquidity management of financial institutions, from November 15, 2026 the reserve requirement ratio on foreign currency deposits rises by 2 percentage points, from 4% to 6%. It was posted on the bank's official account and carried by Xinhua.

What the ratio is. Banks that take deposits in dollars and other currencies must keep part of that money at the central bank. The higher the ratio, the less foreign currency banks can lend or sell in the market. So there are fewer dollars inside China and relatively more yuan.

Why now. The bank gave no reason beyond liquidity. Investing.com says the move signals Beijing's concern about the yuan's quick rise: in October it hit a more than four-year high, largely due to stronger official fixings set by the PBOC itself. A strong yuan makes Chinese goods pricier for buyers abroad, and exports are the main engine of China's economy.

Reaction. Per Sina Finance, the offshore yuan weakened to 6.65729 per dollar after the announcement. The offshore rate is where the yuan trades outside mainland China, for example in Hong Kong.

Who it affects. Importers and exporters who deal in yuan, people trading dollar-yuan, and anyone watching Asian currencies, since the yuan often pulls its neighbours along. For live FX rates, see https://freekonomist.com/en/forex/ . This is an overview, not advice.

Fatos confirmados

• From November 15, 2026 the People's Bank of China raises the reserve requirement ratio on foreign currency deposits by 2 percentage points, from 4% to 6%.^[1]
• The stated aim is to strengthen financial institutions' FX liquidity management.^[1]
• The notice was posted on the PBOC's official WeChat account and carried by Xinhua on November 3.^[1]
• A higher ratio reduces dollar supply and adds yuan liquidity, a move that is negative for the yuan.^[2]
• In October the yuan reached its strongest level in more than four years.^[2]
• The offshore yuan weakened to 6.65729 per dollar after the announcement.^[3]

Implicações

• ConfirmadoFrom November 15, Chinese banks hold more foreign currency in reserve and can sell less of it in the market.
• Nossa leituraChinese authorities appear to want to slow the yuan's rise to protect exports. This is our view, following Investing.com.
• Nossa leituraIf the yuan stops rising, other Asian currencies may feel it too. This is our view.

Ainda não se sabe

• How many dollars banks will actually pull from the market
• Whether the PBOC will also set weaker official fixings
• Whether this is enough if the dollar keeps weakening globally

Quem é afetado

China, Asia, World. People who trade currencies, do business with China or follow the yuan

Fontes

1. Xinhua (text of the People's Bank of China notice): 中国人民银行决定上调金融机构外汇存款准备金率 3 de novembro de 2026 · oficial
2. Investing.com: Народный банк Китая повысил норму резерва по валюте до 6% 3 de novembro de 2026 · mídia
3. Sina Finance: 中国人民银行决定上调金融机构外汇存款准备金率 离岸人民币短线走低 3 de novembro de 2026 · mídia