PBOC raises bank reserve requirement again

The People's Bank of China said Friday 16 February it has raised bank reserve requirements, with effect from 25 February.
The People's Bank of China said Friday 16 February it has raised bank reserve requirements, with effect from 25 February.

The PBOC said reserve requirements have been raised by 50 basis points, which would bring the reserves most banks would have to maintain up to 10 pct.

This is the second reserve requirement increase this year, and the fifth since June. The bank has now raised the reserve requirement by a combined 250 basis points since its first move in the current cycle.

'The (central bank) needs to raise the deposit reserve requirement ratio again, based on the liquidity situation, ' the central bank said in a statement posted on its website.

'The international payments imbalance is still a major problem, and the pressure on lending growth is increasing,' it added.

The central bank statement added that it will also continue to pursue a 'prudent' monetary policy and guide 'reasonable' money and credit growth.

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