China’s central bank raises reserve ratio on FX deposits from 4% to 6%
The measure takes effect on November 15 and reduces dollar supply at Chinese banks. The yuan's central parity is 6.7150 per dollar.
The People’s Bank of China (PBoC) will raise the reserve requirement ratio on foreign-currency deposits by 2 percentage points, from 4% to 6%, from November 15, 2026, Xinhua reported on November 3. The central bank said the aim is to strengthen financial institutions’ foreign-currency liquidity management.
In practice, banks must hold back a larger share of the dollars they take in deposits, reducing dollar supply in the domestic market. On the same day, the yuan’s central parity was set at 6.7150 per dollar, 4 basis points weaker than the previous day, according to the China Foreign Exchange Trade System, as cited by China News Service.
CSP take: with the yuan near 6.7 per dollar, the higher reserve ratio suggests Beijing would rather avoid fast appreciation. For importers, that helps contain dollar price increases but does not remove the risk: consider fixing FX or prices in long contracts. This reading is ours, not the PBoC’s.
Original sources
- Xinhua (新华网): PBoC eleva compulsório sobre depósitos em moeda estrangeira
- China News Service (中新网): taxa central de 3/11
CSP take marks the newsroom's interpretation; everything else comes from the cited sources.
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