China's offshore yuan jumps after c. bank raises FX forwards reserve requirement
LONDON, Aug 3 (Reuters) - China's offshore yuan rose sharply on Friday after the country's central bank said it would adjust its forward foreign exchange risk reserve requirement ratio to 20 pct from zero.
The yuan hit a session high of 6.8270, up 0.8 percent on the day.
China's offshore yuan has been under pressure on worries the months-long trade dispute between the United States and China will hurt its economy. The yuan weakened to 14-month lows earlier this week.
"It's a statement of intent from the #PBoC (People's Bank of China) and suggests they don't want to see $USDCNY trading above 7.00 anytime soon. Whether they have the willingness to prevent this is another matter (outflow pressures will probably remain if U.S. tariffs increase)," Viraj Patel, a forex analyst at ING, said on Twitter.
The bank also said it would take counter-cyclical measures to keep forex markets stable based on market conditions.
(Reporting by Tom Finn Editing by Tommy Wilkes)
