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The PBOC announced a second reduction in the foreign currency reserve requirement this year to slow yuan depreciation, which had hit two-year lows against the dollar. Analysts linked the move to upcoming political events and capital outflow concerns.
Stabilizing the yuan supports Chinese dollar purchasing power for imports, though the effect on feed demand is indirect and the price impact is modest.
cnbc.comEvelyn ChengSep 6, 2022After 50 past bearish policy events, Chinese Yuan (CNY per USD) moved a median -0.1% over 5 sessions (46% higher; middle half -0.4% to +0.4%), and -0.0% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Coverage of the PBOC's second FX reserve cut to slow depreciation reinforces the official-support sentiment that drove the one-day yuan move.
