Xing Zhaopeng

Stories

China raises forex reserve ratio to slow the yuan's climb

Active analyst

The People's Bank of China will require banks to hold 6% of foreign currency deposits in reserve from November 15, up from 4%. That pulls roughly $24 billion of dollar liquidity out of the banking system. The yuan weakened on the news and kept sliding as the central bank set three weaker daily fixings in a row.

Updated 4 days ago

China shifts its main policy rate to an overnight lending rate

Rule Changes

Assessing the bank-margin effect

China's central bank now sets the price of overnight money every business day. On Nov. 2, the People's Bank of China made its first daily overnight reverse repo operation at 1.25%, replacing the seven-day rate it had used as its main policy signal.

Updated Nov 2

China's economy rebounds to 4.5% growth in third quarter

Money Moves

Analyst focused on the fiscal policy debate and 2027 risks

China's economy grew 4.5% in the third quarter, beating forecasts and lifting growth for the first nine months to 4.6%. That keeps 2026 inside Beijing's 4.5%-5% target, provided the fourth quarter holds.

Updated Oct 20

Notable Quotes

The increase in the FX RRR would not be enough to ease the oversupply.

from China raises forex reserve ratio to slow the yuan's climb · Updated 4 days ago

"It's effectively a red packet for financial institutions, boosting their net interest margins by about 5 basis points."

from China shifts its main policy rate to an overnight lending rate · Updated Nov 2

The recovery remains unsolid because the fiscal outlook is not stable. The question will be how much fiscal expansion can do in the future. We still see a downside risk to 2027.

from China's economy rebounds to 4.5% growth in third quarter · Updated Oct 20