FINANCE

China Moves to Curb Yuan Rally

Published: Feb. 27, 2026 6:09 p.m. GMT+8

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The People’s Bank of China. Photo: VCG

China’s central bank moved to slow the yuan’s recent rally, cutting a key foreign exchange risk reserve ratio to zero and reviving a policy tool last used in 2022.

The People’s Bank of China (PBOC) said Friday it will lower the risk reserve ratio on forward forex sales from 20% to zero, effective Monday.

The yuan has strengthened from above 7.2 per dollar in May 2025 to around 6.85, gaining roughly 3% in the past three months.

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The People’s Bank of China cut the forex risk reserve ratio on forward sales from 20% to zero, effective Monday.
The yuan had appreciated about 3% in three months, strengthening from over 7.2 to around 6.85 per US dollar.
Lowering the ratio aims to slow the yuan’s rally by reducing banks’ forward-selling costs and was last at 20% in September 2022.

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