The People's Bank of China is to raise the reserve requirements for financial institutions from September 21. The deposit reserve ratio is to be increased from 6 per cent to 7 per cent in response to what the Bank described as 'an excessive increase in the current monetary lending'.
The PBOC said the move was modest and would not cause a decrease in overall lending this year. In 1998, the ratio was slashed from 13 per cent to 5 per cent as the government tried to stimulate the domestic economy during the Asian financial crisis.