# China c.bank to cut FX reserve ratio to help limit yuan weakness

> The People's Bank of China will cut the foreign exchange reserve requirement ratio from 8% to 6% starting Sept. 15 to ease yuan weakness. The yuan had fallen about 8% against the dollar year to date, reaching two-year lows.

- Date: 2022-09-05 · published 2022-09-05T12:00:00.000Z
- Category: policy · region China · magnitude medium
- Page: https://feedsoft.ai/events/12267-china-c-bank-to-cut-fx-reserve-ratio-to-help-limit-yuan-weakness
- Commodities: [Chinese Yuan (CNY per USD)](https://feedsoft.ai/c/USDCNY.md)

## Why it matters

A lower FX reserve requirement adds dollar liquidity and signals support for the yuan, which can modestly ease pressure on Chinese import demand for feed ingredients priced in dollars.

## Read by commodity

- USDCNY: bearish ▼

## Linked price moves

| Commodity | Date | Window | Change % | z-score | Why linked |
| --- | --- | --- | --- | --- | --- |
| USDCNY | 2022-09-06 | 1 | +0.8% | 3.0 | The Sept. 5 announcement of the FX reserve requirement cut from 8% to 6% was the policy trigger that increased FX supply expectations and curbed yuan weakness, shifting USD/CNY by Sept. 6. |

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| USDCNY | 2022-04-26 | [China cuts banks’ FX reserve ratio to support yuan - Business & Finance - Business Recorder](https://feedsoft.ai/events/7640-china-cuts-banks-fx-reserve-ratio-to-support-yuan-business-and-finance-business.md) | +0.8% | +1.4% |
| USDCNY | 2022-09-26 | [China acts to rein in yuan slump, poised to raise FX risk reserve ratio By Reuters](https://feedsoft.ai/events/7212-china-acts-to-rein-in-yuan-slump-poised-to-raise-fx-risk-reserve-ratio-by.md) | -0.2% | +1.9% |
| USDCNY | 2022-09-06 | [China’s yuan rebounds from 2-year low after PBOC cuts FX reserve ratio - Markets - Business Recorder](https://feedsoft.ai/events/12271-china-s-yuan-rebounds-from-2-year-low-after-pboc-cuts-fx-reserve-ratio-markets.md) | +0.4% | +3.1% |
| USDCNY | 2019-05-17 | [China's central bank won't let yuan weaken past 7 to the dollar-sources](https://feedsoft.ai/events/59283-china-s-central-bank-won-t-let-yuan-weaken-past-7-to-the-dollar-sources.md) | +0.4% | +0.6% |
| USDCNY | 2016-12-03 | [China should use part of its foreign reserves to stabilize yuan expectations: central bank adviser](https://feedsoft.ai/events/73694-china-should-use-part-of-its-foreign-reserves-to-stabilize-yuan-expectations.md) | +0.3% | +1.1% |

## Sources

- reuters.com: https://www.reuters.com/markets/asia/china-cbank-cut-fx-reserve-ratio-help-limit-yuan-weakness-2022-09-05/

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.