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China · Central banks · Source: english.www.gov.cn
China raises FX reserve ratio to 6% and runs third stock-market swap operation
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Editor: Hedal Kolanyi / AI-assisted
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Summary: The People's Bank of China said on 3 November that it will raise the foreign-exchange reserve requirement ratio for financial institutions from 4% to 6% from 15 November. On the same day it ran a third operation of its swap facility, which lets securities, fund and insurance companies exchange assets such as bonds and stock ETFs for highly liquid assets such as government bonds, to support their capacity to buy stocks.
What happened
The central bank's announcement, listed on its website on 3 November and carried in full by Xinhua from the bank's official WeChat account, says it will raise financial institutions' foreign-currency deposit reserve ratio by 2 percentage points, from 4% to 6%, effective 15 November 2026. It gives the purpose as strengthening the management of financial institutions' foreign-exchange liquidity. The ratio sets how much of their foreign-currency deposits banks must keep with the central bank.
Reuters calculated that the move would withdraw about US$24 billion from the financial system, a figure that is Reuters' own estimate. Reuters also reported that the onshore yuan weakened by as much as 0.37% to 6.6728 per dollar after the announcement, and that the currency is up more than 5% this year. Reuters described the step as aimed at slowing the yuan's rally; that characterisation is the agency's and is not part of the central bank's wording. China Daily said analysts see the move as a way to prevent sharp short-term swings in the exchange rate.
On the equity side, Xinhua reported that the central bank announced on 2 November, after a meeting with the financial regulator (NFRA) and the securities regulator (CSRC), that relending for share buybacks and shareholding increases becomes a long-term arrangement, with the relending rate cut from 1.25% to 1%. Xinhua said about 440 billion yuan of such loans have been signed and over 280 billion yuan paid out. The bank also said it would run swap-facility operations in a timely manner, add participating institutions and appropriately lower swap fees. On 3 November, Xinhua's Chinese-language service reported that the third operation of the Securities, Funds and Insurance Companies Swap Facility had taken place: 100 billion yuan, with 31 securities and fund companies bidding at a winning rate of 10 basis points.
Background
The swap facility was introduced in October 2024. Xinhua reported that the first operation, on 21 October 2024, was 50 billion yuan with 20 bidders, and the second, on 2 January 2025, was 55 billion yuan. The CSRC said 645 listed companies disclosed 700 buyback plans totalling 237.7 billion yuan in the first ten months of this year.
Note: the reserve-ratio decision is taken from the central bank's announcement as published in full by Xinhua (our translation); the announcement page on the central bank's website could not be opened from our location. The details of the stock-market measures come from Xinhua's reports of official statements.
Why it matters for markets and crypto
Reserve requirements and liquidity facilities are standard central bank tools for influencing currency and share-market conditions. The article does not assess any specific asset. The topic relates to the wider economy, and the currency figures above are market prices at one moment.
What to watch next
- 15 November: The new 6% foreign-currency reserve ratio takes effect.
- Further operations: The central bank said it will run swap-facility operations in a timely manner (Xinhua's paraphrase); no further dates were given in the reports reviewed.
Sources
- People's Bank of China: news list with the 3 November 2026 announcement (in Chinese)
- Xinhua (Chinese), 3 November 2026: full text of the PBOC announcement (from the PBOC's official WeChat account)
- Xinhua via gov.cn: PBOC to raise FX reserve requirement ratio (3 November 2026)
- Reuters via Investing.com: China to raise forex deposit reserve ratio to 6% (2–3 November 2026)
- China Daily, 3 November 2026
- Xinhua (English), 3 November 2026: stock-market support measures
- Xinhua (Chinese), 3 November 2026: swap facility third operation
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