PBOC Announces Major Adjustment: Foreign Exchange Risk Reserve Ratio for Forward Sales Cut to 0%

Policy Background and Adjustment Details

The People's Bank of China has recently announced a significant adjustment in foreign exchange market policy, deciding to reduce the foreign exchange risk reserve ratio for forward sales from 20% to 0 starting March 2, 2026. This move is seen as a key step in further optimizing the environment for corporate exchange risk management.

Implications and Market Impact

This adjustment not only lowers foreign exchange transaction costs for companies but also boosts market vitality. The central bank emphasized that it will continue guiding financial institutions to enhance hedging services, ensuring the stability of the RMB exchange rate at a reasonable and balanced level.

Future Outlook

This decision provides more flexible financial operation space for foreign trade enterprises, helping enhance their competitiveness in the global market. It also highlights the regulatory authorities' determination to continuously promote reform in the foreign exchange market.