The People’s Bank of China, the country’s central bank, said on Tuesday it will raise the foreign exchange reserve requirement ratio by 2 percentage points to 6 percent from 4 percent, effective Nov 15, 2026.

The PBOC said the move is aimed at strengthening foreign exchange liquidity management for financial institutions.

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The ratio is the share of foreign currency deposits commercial banks are required to hold as reserves. The move is seen by analysts as a bid to prevent short-term sharp fluctuations in exchange rates, following the onshore yuan strengthening to 6.64 against the dollar on Monday.