China's PBOC Slashes FX Forward Reserve to Zero, Making Yuan Shorting Cheaper

Araverus Team|Friday, February 27, 2026 at 6:14 AM

Araverus Team

Feb 27, 2026 · 6:14 AM

Currency Intervention · PBOC · Yuan

Currency Intervention PBOC Yuan

China's central bank, the People's Bank of China (PBOC), has reduced the risk reserve requirement ratio for financial institutions involved in foreign-exchange forward trading to zero from 20%.

This move aims to curb the rapid appreciation of the yuan. Following this announcement, China's offshore yuan experienced a slight weakening of approximately 0.1%.

The reduction in the reserve requirement is intended to make it less costly for institutions to bet against the yuan, thereby discouraging further strengthening.

China's PBOC Slashes FX Forward Reserve to Zero, Making Yuan Shorting Cheaper

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