PBOC to raise deposit reserve ratio by 0.5 percentage points
(Xinhua)
Updated: 2006-07-21 19:51
The People's Bank of China, or the central bank, announced Friday to raise
the deposit reserve ratio of banks, excluding rural cooperative banks and credit
cooperatives, by 0.5 percentage points, effective on August 15.
The hike will bring the reserves that most banks are required to keep in
deposit with the central bank to 8.5 percent.
"The move aims to tighten up the banks' liquidity management, curb the
excessive growth of money and credit, and maintain the good development momentum
of the economy," said the central bank in a statement posted on its website.
China's economy surged a year-on-year 10.9 percent in the first half of 2006,
the fastest in a decade. Total investment in roads, factory equipment and other
fixed assets soared 29.8 percent, an increase of 4.4 percentage points from the
same period of last year.
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