# Why China's central bank is shoring up the yuan

> 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.

- Date: 2022-09-06 · published 2022-09-06T12:00:00.000Z
- Category: policy · region China · magnitude medium
- Page: https://feedsoft.ai/events/12268-why-china-s-central-bank-is-shoring-up-the-yuan
- Commodities: [Chinese Yuan (CNY per USD)](https://feedsoft.ai/c/USDCNY.md)

## Why it matters

Stabilizing the yuan supports Chinese dollar purchasing power for imports, though the effect on feed demand is indirect and the price impact is modest.

## 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 | Coverage of the PBOC's second FX reserve cut to slow depreciation reinforces the official-support sentiment that drove the one-day yuan move. |

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| USDCNY | 2017-08-28 | [China's Central Bank Is Embracing a Supercharged Yuan - Bloomberg](https://feedsoft.ai/events/10856-china-s-central-bank-is-embracing-a-supercharged-yuan-bloomberg.md) | -1.4% | -0.4% |
| 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 | 2022-04-27 | [China economy: Central bank tries to slow weakening yuan vs US dollar](https://feedsoft.ai/events/4947-china-economy-central-bank-tries-to-slow-weakening-yuan-vs-us-dollar.md) | +0.8% | +1.5% |
| USDCNY | 2023-07-06 | [China's yuan firms as central bank pledges again to stabilize currency](https://feedsoft.ai/events/35262-china-s-yuan-firms-as-central-bank-pledges-again-to-stabilize-currency.md) | -1.1% | -0.8% |
| USDCNY | 2022-09-29 | [Exclusive: China's state banks told to stock up for yuan intervention](https://feedsoft.ai/events/7209-exclusive-china-s-state-banks-told-to-stock-up-for-yuan-intervention.md) | -1.2% | +0.3% |

## Sources

- cnbc.com: https://www.cnbc.com/2022/09/06/why-chinas-central-bank-is-shoring-up-the-yuan.html

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