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2026-11-03 14:28:26
[What is the significance of raising the foreign exchange deposit reserve ratio for financial institutions to 6%? Expert analysis is here] Today (October 3), the People's Bank of China (PBOC) announced that, in order to strengthen the management of foreign exchange liquidity in financial institutions, it has decided to raise the foreign exchange deposit reserve ratio for financial institutions by 2 percentage points, effective November 15, 2026. After the increase, the foreign exchange deposit reserve ratio will rise from the current 4% to 6%. Experts explained that when the RMB exchange rate appreciates too rapidly, the central bank's increase in the foreign exchange deposit reserve ratio can tighten domestic dollar liquidity and alleviate the pressure of RMB appreciation. Experts stated that the central bank's decisive action will, on the one hand, freeze approximately $200 to $250 billion in foreign exchange liquidity at the banking level, promoting a balance between supply and demand in the domestic foreign exchange market; on the other hand, it will also help break the illusion of unilateral exchange rate appreciation held by some entities, stabilize market expectations, and maintain the smooth operation of the foreign exchange market. (CCTV News)
