Forward foreign exchange sales business foreign exchange risk reserve ratio reduced to 0

2026-02-28 00:30:31

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Yue Hongbin

Beijing, February 27 (Xinhua) — According to the People’s Bank of China (PBOC) on the 27th, to promote the development of the foreign exchange market and support enterprises in managing exchange rate risk, the PBOC has decided to reduce the foreign exchange risk reserve ratio for forward foreign exchange sales from 20% to 0% starting March 2, 2026. This is the first adjustment since September 2022, when the PBOC raised the reserve ratio to 20%.

Forward foreign exchange sales are a type of derivative product offered by banks to help enterprises hedge against exchange rate risk. Industry experts generally believe that this reduction will lower the cost for enterprises to purchase foreign exchange forward contracts, encourage more active use of foreign exchange hedging, and support enterprises in managing exchange rate risk through appropriate use of foreign exchange derivatives.

Next, the PBOC will continue to guide financial institutions to optimize their foreign exchange hedging services for enterprises and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level.

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