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ForexMediumUpdated×2•Originally published 27 February 2026•Updated 27 February 2026•

1 min read

PBOC Scraps FX Risk Reserve as USD/CNH Climbs Above 6.8500

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Key Facts

1The People's Bank of China (PBOC) announced a cut in the foreign exchange risk reserve ratio from 20% to 0%.

3 months ago

Version History

Version 23 months ago

What changed: The story was updated to include the immediate market reaction, noting that the USD/CNH exchange rate climbed above the 6.8500 level following the central bank's announcement.

Version 13 months ago

What changed: Added historical context identifying the move as a reversal of a September 2022 policy and included analyst sentiment suggesting the Yuan's strength may persist.

The People's Bank of China (PBOC) has announced it will cut the foreign exchange risk reserve ratio for forward sales from 20% to 0%, effective March 2. This move reverses a tightening measure introduced in September 2022 that was originally intended to curb rapid Yuan depreciation. By eliminating the reserve requirement, the central bank aims to lower hedging costs and alleviate the upward pressure on the Yuan (CNY). Following the announcement, the USD/CNH exchange rate reacted by rising above the 6.8500 level. The policy shift highlights China's ongoing efforts to balance capital flows and maintain export competitiveness by moderating the currency's recent strength. This intervention is expected to continue impacting major currency pairs, including USD/CNY and USD/CNH, as market dynamics adjust to the new rules.