After more than four months of substantial appreciation of the RMB exchange rate, the central bank adjusted and implemented the foreign exchange risk reserve ratio for more than two years.
On the evening of October 10, the central bank issued a message stating:
Since the beginning of this year, the RMB exchange rate has been floating in both directions based on market supply and demand, with increased flexibility, stable market expectations, orderly cross-border capital flows, stable operation of the foreign exchange market, and a balanced market supply and demand.
For this reason, the People’s Bank of China has decided to lower the foreign exchange risk reserve ratio for forward foreign exchange sales from 20% to 0 from October 12, 2020.
In the next step, the People’s Bank of China will continue to maintain the flexibility of the RMB exchange rate, stabilize market expectations, and keep the RMB exchange rate basically stable at a reasonable and equilibrium level.
Post time: Oct-11-2020