Report: PBOC to require special deposits

The People's Bank of China (PBOC) will require a special deposit from city commercial banks and credit associations sometime this month, Shanghai Securities News reported (in Chinese), citing an unnamed source. The move, which has not been confirmed by the central bank, would supplement other recent measures to shore up excess liquidity, including last week's reserve requirement rise and an issue of direct central bank notes to the country's "big four" banks. The PBOC has extended such measures to second-tier lenders only twice since 1987. According to the report, the total size of the special deposits will be less than US$13 billion.