Overview
- China’s central bank cut the foreign‑exchange risk reserve ratio for forward sales to 0% from 20%, effective March 2, reversing a 2022 tightening step.
- Offshore USD/CNH rose about 0.3% after the announcement and the yuan’s winning streak snapped as traders trimmed crowded long positions.
- The PBOC kept the daily USD/CNY midpoint near 6.9228 with a record-large gap versus estimates, signaling a preference to slow rapid appreciation.
- JPMorgan closed its long offshore yuan trade and other desks took profits, reflecting a near‑term shift toward neutral positioning.
- The central bank also refined rules for cross‑border yuan interbank financing to support offshore liquidity, with analysts noting additional tools remain available if appreciation pressure resumes.