The People's Bank of China announced on 3 November 2026 that it will raise the foreign-exchange deposit reserve requirement for financial institutions from 4% to 6% with effect from 15 November. Reuters estimated that the adjustment could withdraw around $24 billion in foreign-CurrencyDefinition A currency is a form of money used to pay for goods and services, measure value, and transfer purchasing power between people and businesses. Examples include t...Read More LiquidityIn price-action language, liquidity is the cluster of orders and stops around obvious highs, lows, and equal levels. It can attract price before the next move.Read More from the banking system. The measure follows a more than 5% rise in the yuan this year. Reuters reported that the onshore yuan weakened by as much as 0.37% against the US dollar after the announcement. This foreign-ExchangeDefinition An exchange is an organised marketplace where buyers and sellers can trade financial assets according to a common set of rules. Examples of assets traded on exc...Read More reserve requirement change is separate from the PBOC's earlier equity-SupportAn area where buyers have previously absorbed enough selling to slow or reverse a fall. It is a zone of interest, not an invisible floor.Read More SwapThe overnight financing adjustment for holding a leveraged position past rollover. It can be a cost or a credit depending on the pair and direction.Read More facility and ShortA position that benefits if price falls. You sell first, then aim to buy back lower—carefully, because losses can grow if price rises.Read More-term repo operations.
The People's Bank of China announced an increase in the foreign-exchange deposit reserve requirement from 4% to 6%, effective 15 November 2026. The move could withdraw approximately $24 billion in foreign-currency liquidity from China's banking system, following a more than 5% AppreciationAppreciation is an increase in the value of one currency compared with another currency. When a currency appreciates, it becomes stronger relative to the currency it is being...Read More in the yuan this year. The onshore yuan weakened by as much as 0.37% against the US dollar after the announcement. The policy adjustment signals efforts to manage currency conditions and foreign-exchange liquidity.
