On PBOC FX reserve cut: "should not be confused with a supportive policy for the economy "

Earlier on the CNY and PBOC re the cut yesterday to the People's Bank of China's FX RRR

• Nomura expects another cut to the People's Bank of China's FX reserve requirement

This, in brief, via ING:

• The PBoC set the foreign currency deposit reserve ratio lower at 8% from 9%. This will release foreign currency at financial institutions and therefore support the CNY.
• This policy should not be confused with a supportive policy for the economy in response to lockdowns. Beijing is having a partial lockdown and mass Covid testing, trying not to repeat Shanghai’s experience. We expect more supportive policy from the regular government meetings to help support lower household income groups in China, but it is much less likely to announce financial help to defaulted real estate property developers.

The PBOC jawboned it was bringing on more support ... awaiting actions though:

• PBOC says it will increase prudent monetary policy support

Yuan update: