FXStreet (Guatemala) – Analysts at Brown Brothers Harriman explained the latest developments in measures that the PBoC are taking to try and stabilize the Yuan.
Key Quotes:
“In the latest regulatory development in China, reports suggest that the PBOC will impose a 20% reserve requirement on financial institutions trading FX forwards.”
“The 20% figure refers to the past month’s sales, which will be kept for a year at no interest. The measure should take effect on October 15. This macroprudential policy is aimed at reducing systemic risk by making life more difficult for speculators.”
“The yuan spot had its third consecutive relatively large appreciation today, gaining 0.2% against the dollar, roughly 0.7% since the middle of last week. The USD/CNY fix dropped 0.2%, the largest since November.”
(Market News Provided by FXstreet)