Skip to content

China Is Taking More Visible Measures to Slow Currency’s Descent

  • PBOC sets fixing weaker than 6.90 for first time in two years
  • More policy moves expected if yuan depreciation reaccelerates
Bloomberg business news
WATCH: The PBOC slashed the amount of foreign-exchange deposits banks need to set aside as reserves to boost the yuan. John Liu reports.Source: Bloomberg
Updated on

China set a stronger-than-expected exchange-rate fixing for a 10th straight day and said it will allow banks to hold less foreign currencies in reserve, its most substantial moves yet to stabilize a weakening yuan.

The People’s Bank of China set the yuan’s reference rate at 6.9096 per dollar on Tuesday, trailing behind the currency’s move to a two-year low. That came a day after the central bank said financial institutions will need to hold just 6% of their foreign exchange in reserve from Sept. 15, effectively increasing the supply of dollars and other currencies onshore. The decrease of 2 percentage points is the biggest in data going back to 2004.