Today, the People's Bank of China announced that in order to strengthen the foreign exchange liquidity management of financial institutions, the People's Bank of China has decided to increase the foreign exchange reserve ratio of financial institutions by 2 percentage points starting November 15, 2026. After the increase, the foreign exchange deposit reserve ratio will be raised from the current 4% to 6%. Experts explained that when the RMB exchange rate appreciates too fast, the central bank increases the foreign exchange reserve ratio, which can tighten domestic dollar liquidity and ease the pressure on RMB appreciation. Experts said that the central bank's decisive action this time will, on the one hand, freeze about 20 to 25 billion US dollars of foreign exchange liquidity at the bank level to promote the balance between supply and demand in the domestic foreign exchange market. On the other hand, it will also help break the fantasy of some players of unilateral exchange rate appreciation, stabilize market expectations, and maintain the smooth operation of the foreign exchange market.

Today, the People's Bank of China announced that in order to strengthen the foreign exchange liquidity management of financial institutions, the People's Bank of China has decided to increase the foreign exchange reserve ratio of financial institutions by 2 percentage points starting November 15, 2026. After the increase, the foreign exchange deposit reserve ratio will be raised from the current 4% to 6%. Experts explained that when the RMB exchange rate appreciates too fast, the central bank increases the foreign exchange reserve ratio, which can tighten domestic dollar liquidity and ease the pressure on RMB appreciation. Experts said that the central bank's decisive action this time will, on the one hand, freeze about 20 to 25 billion US dollars of foreign exchange liquidity at the bank level to promote the balance between supply and demand in the domestic foreign exchange market. On the other hand, it will also help break the fantasy of some players of unilateral exchange rate appreciation, stabilize market expectations, and maintain the smooth operation of the foreign exchange market.