Sources told Reuters on Sunday that the PBOC is preparing to raise the reserve requirement ratio next week for yuan deposits placed in yuan clearing banks. The rate is currently at zero.

The PBOC confirmed the move would be effective on Jan. 25, but made no mention of increasing restrictions on banks in its statement.

Some analysts said the announcement may at this stage be a more symbolic warning to banks, aimed at discouraging them from being too active in yuan dealings as part of the PBOC’s broader campaign to stabilize the yuan in offshore markets.

The offshore yuan, or CNH, fell earlier this month to its lowest level since trading began in 2010 on fears that China was planning to sharply devalue its currency to boost the slowing economy.

“The market sees that this is a gesture by PBOC to warn the speculators that are betting on a fast depreciation of its currency,” said Zhou Hao, senior emerging market economist for Asia at Commerzbank in Singapore.

HSBC estimates offshore yuan deposits totalled 1.45 trillion yuan ($220.41 billion) in the four main markets of Hong Kong, Taiwan, Singapore and South Korea as of last November.

Market participants suspect that any increase in the reserve ratio would be intended to soak up additional liquidity in the offshore yuan market.

By forcing banks offshore to hold more yuan in reserve, it would reduce the amount of the currency available in the market, squeezing supply further and making it more difficult and expensive for speculators.

According to other sources and HSBC analysts, the deposits that will be affected include:

1) Offshore participating banks’ CNH deposits placed with onshore correspondent banks;

2) CNH deposits from Bank of China Hong Kong and Macau with PBoC Shenzhen and Zhuhai;

3) other offshore clearing banks’ CNH deposits placed with onshore parent banks.

The rule applies to yuan deposits from offshore financial institutions that are put in onshore financial institutions, excluding foreign central banks, monetary authorities, international financial organizations and sovereign wealth funds.

The PBOC has been under increasing pressure from policy advisers to let the currency fall quickly and sharply, after spending billions of dollars buying yuan over recent months to defend the exchange rate.

Confusion over China’s foreign exchange policy and its commitment to reforms has roiled global financial markets in recent weeks as the central bank allowed the yuan to fall and then moved in aggressively to try to stabilize it.

The PBOC said on Monday will continue to use multiple policy tools to maintain ample liquidity in the domestic banking system. ($1 = 6.5790 Chinese yuan renminbi) ($1 = 6.5785 Chinese yuan renminbi) (Reporting by the Beijing Monitoring Desk and Sue-Lin Wong, additional reporting by Michelle Chen in Hong Kong; Editing by Kim Coghill)