China to slap new requirement on yuan trades to stem swings

Beijing

CHINA'S central bank added to measures designed to shore up the yuan, making it more costly for traders of forwards contracts to bet on swings in the currency.

The People's Bank of China will impose a reserve requirement on financial institutions trading in foreign-exchange forwards for clients, according to six people familiar with the matter. The change, which takes effect on Oct 15, will mandate a deposit of 20 per cent of sales to be held at zero interest for a year, said the people, who asked not to be identified because they aren't authorised to speak on the issue.