China reduced the amount of foreign currency deposits banks are required to hold as reserves for the first time this year, in a more visible step to p
China reduced the amount of foreign currency deposits banks are required to hold as reserves for the first time this year, in a more visible step to prop up the under-pressure yuan.
Financial institutions will need to carry just 4% of their foreign exchange deposits in reserve starting September 15, the People’s Bank of China said Friday, compared to the current level of 6%. The move effectively boosts the amount of foreign currency available in the local market, making it relatively more appealing for traders to buy the yuan.
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