BEIJING: China's central bank said on Saturday that reserve requirements of 20pc for financial institutions settling foreign exchange forward yuan positions will be cut to zero starting Oct. 12.

The cut will effectively make it less costly to short the Chinese yuan.

China's onshore spot yuan ended at a 17-month high on Friday against the dollar, in its biggest one-day percentage gain since 2005.

The 20pc reserve requirement ratio was imposed in 2018.