Central bank to raise deposit reserve ratio

Updated: 2006-11-03 20:15

BEIJING -- The People's Bank of China, or the central bank, announced on Friday that it has decided to raise the deposit reserve ratio of banks, excluding rural cooperative banks and credit cooperatives, by 0.5 percentage points, starting from November 15.

A clerk at a foreign currency exchange desk shows Chinese yuan banknotes in this July 22, 2005 file photo taken at a hotel in Shanghai, China. [AP]

This will be the bank's third time this year to raise the deposit reserve ratio, or 1.5 percentage points in total.

Related readings:
China rate hike not likely until Q2 2007

Deposit reserve ratio raised by 0.5%

Central bank keeps level of deposit rate

The move showed the bank's determination to continue implementing a prudent monetary policy to tighten up the banks' liquidity management, ensure the stable growth of money and credit, and maintain the sustained, coordinated and healthy development of the economy.

The hike will bring the reserves that most banks are required to deposit with the central bank to 9 percent.

The central bank raised the bank deposit reserve ratio by the same margin of 0.5 percentage points in August and July.

The previous two hikes helped to take around 300 billion yuan out of the banking system.

Top China News  
Today's Top News  
Most Commented/Read Stories in 48 Hours