China's central bank is reportedly preparing to raise the reserve requirement ratio for yuan deposits placed in yuan clearing banks. [File Photo: jrzj.com]

It's been reported that China's central bank is preparing to raise the reserve requirement ratio for yuan deposits placed in yuan clearing banks, starting from January 25.

Reuters quoted sources saying that offshore clearing banks located in Hong Kong and Macao, which already maintain deposits with central bank branches in Zhuhai and Shenzhen, will be required to maintain reserves there.

Other yuan clearing banks will be required to maintain the reserves onshore at accounts held by parent institutions.

The People's Bank of China established the reserve requirement ratio for offshore yuan participating banks in 2014.

For more on this topic, CRI’s Shane Bigham spoke with Mike Bastin, Director of the China Business Centre at Soutampton Solent University based in London.