PBOC Raises FX Deposit Reserve Ratio to 6%

The signal here is about expectations, not liquidity mechanics: lifting the FX deposit reserve ratio makes holding dollar deposits costlier for banks, a targeted way to lean against one-way yuan appreciation bets. It matters most for banks and corporates managing FX positions, since the tool works through their incentives rather than through rate changes. What is worth watching is whether the move actually breaks the self-reinforcing appreciation expectation the PBOC cites, or whether further administrative measures follow if it does not.