China’s Central Bank Moves Further to Bolster the Yuan

China’s central bank took another step to shore up the yuan, making it more expensive for traders and institutions to bet against the currency after it weakened rapidly against the dollar.

The People’s Bank of China said on Monday that financial institutions selling foreign-exchange forward contracts will be subject to a 20% risk-reserve ratio, up from zero currently. The change, which will kick in on Sept. 28, will make it costlier for banks—and correspondingly, their clients—to sell yuan to buy dollars in the derivatives markets.

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