The PBOC will raise the foreign-exchange reserve requirement to 6% from 4%, its first hike since 2021, after 13 straight sessions of yuan gains. The official manufacturing PMI fell to 49.3 while the private RatingDog gauge held at 52.0.
The PBOCβs first FX reserve-ratio increase since late 2021 is meant to absorb dollar liquidity after the yuanβs longest winning streak since 1996. Source
The People's Bank of China (PBOC) will lift the foreign-exchange reserve requirement ratio (RRR) for financial institutions by 2 percentage points, to 6% from 4%, effective 15 November. It is the first increase since late 2021 and undoes the September 2023 cut. Reuters estimates it will withdraw about $24bn of dollar liquidity. The onshore yuan fell as much as 0.4% to 6.6728 per dollar, its sharpest one-day drop in six months, and Bloomberg said that ended 13 straight sessions of gains, the longest run since 1996.
