PBoC sets FX reserve requirements

摘要

China's central bank will require reserves to be set aside for purchases of all currency derivatives from October, according to a document seen by Reuters, as Beijing moves to make it more expensive to bet on further depreciation of the renminbi. The move expands the scope of a similar document, seen on Tuesday, in which the central bank said it would require banks to hold reserves on behalf of clients' trading of currency forwards, in a move to curb speculation and volatility after the August 11 shock devaluation of the currency. According to the People's Bank of China document seen on Wednesday, reserve ratios will be set at 20% of the nominal value of forwards and swap contracts, and fixed at 10% of the nominal value of principal for options.