The Chinese government has raised the reserve requirements for the nation’s six largest banks, Reuters reported. The new requirement, which raises the deposit-reserve ratio by 50 basis points to 17.5%, is designed to mop up excess liquidity and to help the central bank manage inflation. A higher reserve ratio requirement also makes further interest rate increases less likely despite widely-acknowledged inflationary pressures in the economy – the consumer price index was up 3.5% in August. The six banks affected by the reserve requirement hike include the Agricultural Bank of China (ABC, 601288.SH, 1288.HK) Bank of China (BoC, 601988.SH, 3988.HK), China Construction Bank (CCB, 601939.SH, 0939.HK), China Merchants Bank (6000036.SH, 3968.HK), China Minsheng Bank (6000016.SH, 1988.HK) and Industrial and Commercial Bank of China (ICBC, 601398.SH, 1398.HK).
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