China Hikes Fx Reserve Ratio to Cool Yuan

The People's Bank of China will raise the reserve requirement ratio on foreign-currency deposits by 2 percentage points, from 4% to 6%, effective November 15. The move tightens the supply of onshore dollars as the yuan ($CNY) keeps strengthening against the dollar, a pace Beijing is trying to slow without reversing it. Banks will now have to lock up a larger share of their foreign-currency deposits at a moment when demand for dollars inside China stays elevated.