China central bank to raise FX reserve ratio to 6% to steady yuan

China’s central bank will raise the foreign-exchange reserve requirement for financial institutions from 4% to 6% starting November 15, requiring banks to hold more foreign currency. The move is intended to tighten dollar liquidity and temper the yuan’s recent appreciation, which has made it one of Asia’s strongest-performing currencies this year. Reuters estimates the change will withdraw about $24 billion from the financial system; analysts say it may also curb one-way expectations for further yuan gains. A stronger yuan could weigh on Chinese exports, an important driver of the economy.