Offshore Yuan Falls After PBOC Raises FX Reserve Requirement

This is a policy signal as much as a liquidity move: by tightening the supply of dollars onshore, the PBOC is raising the cost of shorting the yuan, and the offshore market's reaction shows how quickly positioning adjusts to that signal. The measure affects banks and anyone holding foreign-currency deposits, and it matters because it shows the central bank leaning against depreciation pressure rather than letting the market clear it. The open question is whether the offshore yuan stabilizes once the initial squeeze passes, or whether the reserve requirement is just the first of further measures.