Foreign lenders required to hold reserves in RMB

PBOC unveils more steps to stabilize currency amid capital outflows

China will require foreign financial institutions in the country to hold yuan in reserve, as the People's Bank of China, the central bank, takes steps to curb speculative sell-offs of the Chinese currency.

This new regulation will come into effect on Jan 25, the PBOC said in a statement on Monday. Until now, the reserve requirement ratio for overseas banks, or the amount of depositor funds they must keep aside, is zero. For major financial institutions on the mainland the RRR is 17.5 percent of their total deposit.