Chinese Yuan: PBoC slows Yuan gains – MUFG
MUFG notes that the People's Bank of China (PBoC) raised the FX reserve requirement ratio to 6% from 4% after USD/CNY moved toward 6.65, effective 15 November. The measure is seen as locking up about USD24 billion in FX liquidity and aiming to slow CNY appreciation rather than reverse it.
The People's Bank of China (PBoC) has raised the foreign exchange reserve requirement ratio to 6% from 4%, effective November 15, in response to the USD/CNY exchange rate nearing 6.65. This measure is anticipated to secure approximately USD24 billion in foreign exchange liquidity, with the goal of moderating the CNY's appreciation rather than reversing it.
MUFG maintains its USD/CNY forecasts at 6.65 by the end of 2026 and 6.50 by Q3 2027. The CNY's appreciation this year can be attributed to China's substantial trade surplus and rising corporate foreign exchange conversion of trade surplus proceeds into Renminbi.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.