SteelOrbis Shanghai
On October 13, the People's Bank of China announced a hike of half a percentage point in the deposit reserve ratio of deposit-taking financial institutions, to be effective from October 25. Thus, the deposit reserve ratio of China's commercial banks will increase to 13 percent, reaching a historical height for recent years.
This is the eighth time during the current year that the Chinese central bank has raised the deposit reserve ratio, with the last adjustment taking place on September 25. Looking at the timings of the recent increases, we can see that the central bank is raising the deposit reserve ratio at a gradually accelerating pace.
In the context of the increasing efforts of the Chinese government to tighten up financial policy, many steel mills and traders have mentioned that the relatively rapid growth in recent capital costs has brought pressure to bear on normal levels of production and sales, and constitutes another important factor affecting the current Chinese steel market.