China News Agency, Beijing, April 25 (Reporter Xia Bin) The People's Bank of China announced on the 25th that in order to improve the ability of financial institutions to use foreign exchange funds, it has decided to reduce the foreign exchange deposit reserve ratio of financial institutions from May 15, 2022. percentage points, that is, the foreign exchange deposit reserve ratio will be lowered from the current 9% to 8%.
The RMB has experienced a rapid depreciation recently.
Market analysis believes that the reduction of the foreign exchange reserve ratio this time is intended to stabilize the exchange rate.
Huang Wentao, chief economist of China Securities, said that at present, the depreciation pressure of the RMB is the greatest in the second and third quarters, and reducing the foreign exchange deposit reserve ratio is one of the means to deal with the depreciation of the exchange rate.
Zhou Guannan, head of the fixed income group and chief analyst of Huachuang Securities, said that with the recent tightening of the Fed's tightening stance, the interest rate gap between China and the United States has inverted, the RMB has withdrawn from the "same rise" range with the US dollar, and depreciation pressure has emerged.
In order to hedge the pro-cyclical impact of RMB depreciation, the exchange rate management tools used by the central bank mainly include six categories: counter-cyclical factors, foreign exchange risk reserves, capital flow management, swap market intervention, central bank bills, and verbal intervention.
Zhou Guannan said that the central bank's tool reserves are relatively sufficient, and the market's view of the current devaluation is relatively rational. In the later stage, we should pay more attention to whether the process of releasing the depreciation pressure is smooth, and the impact on the domestic policy easing space after the pressure is cleared.
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