China's central bank said it would cut the amount of foreign exchange banks must hold as reserves, a move aimed at slowing the depreciation of the yuan, after the Chinese currency touched a more-than-two-year low against the dollar on Monday.
The People's Bank of China said it would lower the foreign-exchange reserve requirement ratio by 200 basis points to 6%, beginning Sept. 15. The move is to "improve financial institutions' ability to use foreign exchange funds," according to a statement.
Chinese central bank officials said during a press conference Monday that the country is capable of strengthening its currency and that the fluctuation in yuan is normal.
This is the second such move this year after the PBOC in April said it would cut the foreign-exchange reserve requirement ratio by 100 basis points to 8%.
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(END) Dow Jones Newswires
09-05-22 0549ET
