China to ask some banks to raise reserve ratio: report


AFP

BEIJING–China’s central bank plans to order some lenders to increase the amount of money they must keep in reserve, amid ongoing concerns about rising prices and housing costs. The People’s Bank of China (PBoC) will raise the reserve requirement ratio at several banks, including the country’s largest state-owned banks, by 50 basis points on Monday, Dow Jones Newswires cited unnamed sources as saying. Calls to the central bank for comment went unanswered. The hike would be the fourth this year. The PBoC in October reportedly ordered six banks, including the four major state-owned lenders, to increase the reserve requirement ratio by 50 basis points to 17.5 percent for two months. The central bank has not yet posted an announcement about last month’s hike on its website as it usually does, suggesting the move could have been communicated internally with the banks. The PBoC last month raised its benchmark one-year lending and deposit rates by 25 basis points each, marking the first interest rate hike in nearly three years. China’s consumer price index (CPI) — a main gauge of inflation — rose 3.6 percent in September from a year ago, the fastest pace since October 2008, and was 0.6 percent higher than the previous month.

The government is due to release a raft of key economic data on Thursday, including the latest inflation figures for October. Economists have widely predicted that price rises will further accelerate. Zhang Ping, head of the National Development and Reform Commission, the top economic planning agency, said Tuesday that CPI was expected to exceed the government’s 3-percent target this year, Chinese media reported.