# China acts to rein in yuan slump, poised to raise FX risk reserve ratio By Reuters

> China's central bank will raise FX risk reserves for forward dollar purchases to 20% from zero starting September 28, making it costlier to bet against the yuan. Spot yuan barely moved on the announcement, trading near 7.15 per dollar.

- Date: 2022-09-26 · published 2022-09-26T12:00:00.000Z
- Category: policy · region China · magnitude medium
- Page: https://feedsoft.ai/events/7212-china-acts-to-rein-in-yuan-slump-poised-to-raise-fx-risk-reserve-ratio-by
- Commodities: [Chinese Yuan (CNY per USD)](https://feedsoft.ai/c/USDCNY.md)

## Why it matters

The measure raises the cost of yuan shorting and may slow depreciation, which modestly supports Chinese import buying power for dollar-priced feed commodities.

## Read by commodity

- USDCNY: bearish ▼

## Linked price moves

| Commodity | Date | Window | Change % | z-score | Why linked |
| --- | --- | --- | --- | --- | --- |
| USDCNY | 2022-09-29 | 1 | -1.1% | -4.4 | The FX risk reserve ratio hike effective Sept 28 raised the cost of shorting the yuan via forwards, curbing depreciation bets with a lagged effect. |
| USDCNY | 2022-09-27 | 5 | +2.3% | 3.8 | The FX risk reserve hike to 20% was meant to curb yuan shorts, but spot barely reacted, so it only limited the move at the margin. |

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| USDCNY | 2022-09-05 | [China c.bank to cut FX reserve ratio to help limit yuan weakness](https://feedsoft.ai/events/12267-china-c-bank-to-cut-fx-reserve-ratio-to-help-limit-yuan-weakness.md) | +0.4% | +3.1% |
| 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 | 2022-09-06 | [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 | 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% |
| USDCNY | 2026-02-27 | [China encourages dollar buying to slow surging yuan \| Reuters](https://feedsoft.ai/events/7895-china-encourages-dollar-buying-to-slow-surging-yuan-reuters.md) | +0.7% | +1.0% |

## Sources

- investing.com: https://www.investing.com/news/economy/china-acts-to-rein-in-yuan-slump-set-to-raise-fx-risk-reserve-ratio-to-20-2898469

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