China Tries to Support Weak Yuan (CNY USD) With Forex Reserve Ratio Cut

China moved to support the yuan by increasing the supply of foreign currency in its local market, part of a multi-pronged effort by Beijing to restore confidence amid sluggish growth.

Financial institutions will need to hold just 4% of their foreign-exchange deposits in reserve starting Sept. 15, the People’s Bank of China said Friday, compared to the current level of 6%. The greater availability of overseas currency relative to the yuan effectively boosts the allure of the latter.

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