People's Bank of China, raising the deposit reserve ratio to 10.5%
The People's Bank of China announced on the April 5, that the deposit reserve ratio will be increased by 0.5 percentage points since April 16, 2007. This increase is for the central bank to cope with the latest situation of excess liquidity measure aimed at controlling the resulting credit expansion and investment rebound.
This is the third time this year the central bank raising the deposit reserve ratio,and the sixth time since June last year. Thus, the required deposit reserve ratio of commercial banks has reached 10.5%.
Since 2004, the soaring trade surplus makes foreign-currency receipts increase resulting in the promotion of domestic credit and investment flows to the increase. Therefore, starting from last year in April, the central bank has been raising the deposit reserve rate six times three percentage points. 3rd regulated financial institutions lending rates,the most recent interest rate increase is on the 17th of last month.
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