THE central bank unexpectedly and temporarily raised reserve requirements for six large commercial banks, reining in liquidity as the economy stabilizes, according to a Reuters report.
The ratio will increase 50 basis points and for two months, Reuters reported yesterday, quoting four unidentified people. The current level is 17 percent for the biggest banks and 15 percent for smaller ones. Market News quoted unidentified traders to the same effect. The People s Bank of China declined to comment.
Yesterday s move may fuel concern that the Chinese economy risks slowing excessively as the government cools the real estate market to limit asset bubbles. Economic growth will ease each quarter this year after peaking in the January-to-March period, the median forecasts in a Bloomberg News survey of economists show.
The central bank may want to act preemptively in managing liquidity, Lu Zhengwei, a Shanghai-based economist at Industrial Bank Co., said before yesterday s reports.
In a Bloomberg News poll July 15, only one of five economists expected another increase in reserve requirements this year. Four expected no change.
China s economic expansion eased to 10.3 percent in the second quarter, less than an 11.9 percent increase in January-March from a year earlier.
The government withdraws cash from the financial system by raising lenders reserve requirements or selling bills, seeking to limit price pressures.
Market News reported that the lenders targeted are Industrial and Commercial Bank of China, Bank of China, China Construction Bank, Agricultural Bank of China, China Minsheng Bank and China Merchants Bank.
(SD-Agencies)
