Central bank raises reserve ratio for 8th time
15 October 2007
The People's Bank of China has announced that the reserve requirement ratio to 13% for commercial banks from October 25, an increase of 0.5 percentage points, Xinhua reported (in Chinese). This is the eighth time banks' reserve ratios have been raised this year, a month after the last increase on September 25. The move is aimed at absorbing liquidity in the banking system and curbing excessive credit growth, the central bank said in a statement. Analysts estimated the move will freeze over US$24 billion of capital in the banking system.
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