Friday, February 18, 2011

People's Bank of China Raises Reserve Requirements 50bps

The People's Bank of China raised the "deposit-taking financial institutions of RMB deposit reserve ratio" by another 50 basis points, as of the 24th of February. The new average required reserve ratio will sit at 19.5% for major banks, and 16% for smaller banks. The move follows the recent increase in interest rates, and shows a continuation of moving toward "prudent monetary policy" settings for 2011, as previously noted by the Chinese authorities. China recorded consumer price inflation of 4.9% in January, up from 4.6% in December, as rising food prices and a strong economy put upward pressure on prices.


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