China surprises with second reserve requirement hike

Chinese currency

In its second policy tightening move this year, the People's Bank of China (PBOC) on Friday hiked by 50 basis points its requirement on the amount of deposits that banks must hold as reserves.

The reserve requirement ratios, now at 16% for big banks and 14% for small banks, will each be raised by 0.5 percentage points as of 25 February. The move follows an identical hike implemented a month ago to mop up excess liquidity in the interbank markets, following a record high of Rmb9.6 trillion ($1.4

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