# China cuts banks’ FX reserve ratio to support yuan - Business & Finance - Business Recorder

> China's central bank said it will cut the foreign exchange reserve requirement ratio for banks by 100 basis points to 8%, effective May 15. The move aims to slow the yuan's depreciation, which had reached a one-year low of 6.5775 per dollar amid COVID lockdowns and a narrowing yield advantage.

- Date: 2022-04-26 · published 2022-04-26T12:00:00.000Z
- Category: policy · region China · magnitude medium
- Page: https://feedsoft.ai/events/7640-china-cuts-banks-fx-reserve-ratio-to-support-yuan-business-and-finance-business
- Commodities: [Chinese Yuan (CNY per USD)](https://feedsoft.ai/c/USDCNY.md)

## Why it matters

A weaker yuan raises the dollar cost of China's imports of feed grains and meal, which can cut demand. The easing is meant to support the yuan, which would reduce that pressure, though the effect on feed prices is indirect.

## Read by commodity

- USDCNY: bearish ▼

## Linked price moves

| Commodity | Date | Window | Change % | z-score | Why linked |
| --- | --- | --- | --- | --- | --- |
| USDCNY | 2022-04-28 | 1 | +1.0% | 4.2 | The PBOC FX reserve ratio cut shows depreciation pressure was strong and the yuan was at one-year lows, but it came earlier and was intended to slow the decline. |

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| 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 | 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 | 2022-09-26 | [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 | 2022-10-26 | [Chinese state banks sold dollars to support yuan late on Tuesday - sources \| Reuters](https://feedsoft.ai/events/6937-chinese-state-banks-sold-dollars-to-support-yuan-late-on-tuesday-sources-reuters.md) | +0.1% | -1.5% |
| USDCNY | 2023-01-06 | [China's cascade of economic support measures spurs yuan buying - The Business Times](https://feedsoft.ai/events/12764-china-s-cascade-of-economic-support-measures-spurs-yuan-buying-the-business.md) | -2.1% | -1.6% |

## Sources

- brecorder.com: https://www.brecorder.com/news/40169452

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