Skip to content
Subscriber Only

China Hits a Bump, or Two, on Road to an Internationalized Yuan

  • PBOC planning reserve requirements on yuan in offshore banks
  • Policy makers trading off market ambitions for stability
Pedestrians walk past a currency exchange store in Hong Kong.
Photographer: Xaume Olleros/Bloomberg

China’s latest measures to shore up its currency and plug an outflow of capital risk setting back the long-held goal for an internationalized yuan.

The People’s Bank of China said Monday that lenders in offshore yuan-trading centers will now have to lock away a share of deposits in its accounts, ending the exemption for foreign institutions in a push to curb speculation against the currency. That followed large-scale intervention in Hong Kong last week that sent yuan borrowing rates in the city soaring to a record as liquidity was temporarily crunched.