The Chinese central bank is fighting against the devaluation of the national currency, the yuan.

Banks will have to park less foreign currency with them in the future, as the currency watchdogs announced.

The so-called minimum reserve rate for foreign exchange will be reduced from 8 to 6 percent from September 15.

This is aimed at "improving the ability of financial institutions to use foreign currency capital," the statement said.

The central bank is reacting to the weakening yuan exchange rate.

This has lost around 8 percent of its value against the dollar in the course of the year to date and was most recently at a two-year low.

The reasons for this are the weakening economy in China and the interest rate hikes by the US Federal Reserve, which are making the dollar more attractive to investors.

The lowering of reserve requirements will increase dollar liquidity in the People's Republic.

This would free up around $19 billion.

"It's not a huge amount compared to the cross-border revenue," said interest rate strategist Frances Cheung of OCBC Bank.

"Nevertheless, the market is paying attention to the signal that the central bank is sending."

The yuan rate rose slightly after the decision was announced.

Some traders and analysts said the cut was expected and a signal to the market that a rapid decline in the yuan is undesirable.

Although Chinese goods abroad become more attractive in price when the yuan devalues, imports have to be paid more for.

Fight against Corona slows down growth

The leadership in Beijing is concerned about the weakening yuan exchange rate, especially since it is making calculations more difficult for companies.

Deputy Minister of Commerce Li Fei announced that the government will therefore help foreign trade companies to hedge against exchange rate risks.

Originally, Beijing had set a growth target of around 5.5 percent for this year.

However, economists believe that this is hardly achievable.

The Chinese authorities have recently intensified their fight against local corona outbreaks.

As a result, the list of major Chinese cities affected by corona restrictions grew longer and longer.

The analysis house Capital Economics counted more than 40 cities that account for a third of China's economic output.

In an analysis, economists from the financial house Nomura assume that restrictions in the People's Republic will remain in place at least until March, when the annual parliamentary session takes place.