China Increases Bank Reserve Ratio

China's major lenders have been ordered to stash more money at the central bank, amid a US$27.1 billion trade surplus and renewed concern about inflation, reports the Wall Street Journal.

 

Citing a statement issued by the People's Bank of China, the Journal says that starting next week, the reserve requirement ratio for banks will rise by half a percentage, putting the standard ratio for large banks up to 17.5%.

 

The tightened bank reserve rule will drain funds from the financial system, helping relieve some of the inflationary pressures that are expected to show up in a high reading on the consumer price index, which is expected to be up 4% from a year earlier, notes the Journal.

 

 

MORE ARTICLES ON BANK RESERVES

Suggested Articles

Some of you might have already been aware of the news that Questex—with the aim to focus on event business—will shut down permanently all media brands in Asia…

Some advice for transitioning into an advisory role

Global risks are intensifying but the collective will to tackle them appears to be lacking. Check out this report for areas of concern