China to cut banks' FX reserve requirements to steady yuan

The news: China's central bank will cut banks' foreign currency reserve requirements as it works to slow the decline of the yuan.

The numbers: The People's Bank of China announced it will cut the foreign exchange reserve requirement ratio (RRR) from 6% to 4% beginning 15 September. The change would free-up roughly $25.3 billion worth of foreign exchange, lower interbank dollar funding costs and relieve pressure on the yuan, Reuters reports.

The context: The yuan has been trending downwards for most of the year, losing as much as 8.5% against the US dollar since mid-January. Today's announcement helped the yuan recover 0.35% to around 13.8 US cents.