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.
Categories