China raises bank reserve requirement 0.5 pct pts to 13 pct, 8th hike this year |
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Sun, 14 Oct 2007 20:53
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BEIJING (XFN-ASIA) - The People's Bank of China raised the reserve requirement for commercial banks 0.5 percentage points to 13 pct, to take effect from Oct 25, the central bank said in a statement posted on its website on Saturday.The PBoC said the hike in the reserve requirement is aimed at 'strengthening management of liquidity in the banking system and checking the overly rapid growth in credit and loans.'Analysts estimate that a 0.5-percentage-point rise in the reserve requirement will freeze about 180 bln yuan in commercial banks.China last raised the reserve requirement by 0.5 percentage points on Sept 25. It also raised the benchmark interest rate by 27 basis points on Sept 14, the fifth such rise this year.China's consumer price index (CPI) surged 6.5 pct year-on-year in August, the highest rise since December 1996; market estimates of the September CPI also put the rise at above 6 pct at least.The sharp rise in the CPI is widely considered to be an indicator of overheating, driven mainly by overinvestment and excess liquidity.(1 usd = 7.51 yuan)jianlin.li@xinhuafinance.comxfnlj/xfntmCOPYRIGHTCopyright Thomson Financial News Limited 2007. All rights reserved.The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
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