China’s central bank has slapped punitive reserve requirements on selected small and medium-sized domestic banks as part of its campaign to curb inflation, Reuters reported, citing a report in the official China Securities Journal. The report said the People’s Bank of China (PBoC) had tailored new reserve requirements for various city-level commercial banks after the end of the lunar new year holiday. The official requirement for large banks currently stands at 19.5%; the report did not describe any specific ratio requirements at particular banks. The PBoC imposed the measure after a two-week lending binge in January that occurred despite the regulators’ efforts to slow loan growth. The targeted reserve requirement method may be the tool of choice in the upcoming months.
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