China Raises Reserve Requirement for Banks’ Forex Deposits Amid Yuan’s Surge

China's central bank said it will raise the amount of foreign currencies banks have to hold in reserve for a second time this year in a move markets interpreted as an effort to rein in the surging yuan.

The People's Bank of China (PBOC) said Thursday it will raise the foreign exchange reserve requirement ratio (RRR) by 200 basis points, or 2 percentage points, to 9% from 7% Dec. 15. The central bank hiked the ratio by the same amount in June, the first increase in 14 years.