On November 19, the People's Bank of China (Chinese central bank) announced its decision to increase the deposit reserve ratio for Chinese banks by 0.5 percentage points, effective from November 29. The Chinese central bank said the measure was aimed at "enhancing liquidity management and moderately regulating credit supply." It is estimated that the increase in the deposit reserve ratio will freeze additional liquidity of about RMB 300 billion (US$44.8 billion).
Anouncement date |
Before adjustment |
After adjustment |
Change |
November 19,2010 |
(large financial institutions) 17.50% |
18.00% |
0.5 |
(small and medium financial institutions) 14.00% |
14.50% |
0.5 |
|
November 10,2010 |
(large financial institutions) 17.00% |
17.50% |
0.5 |
(small and medium financial institutions) 13.50% |
14.00% |
0.5 |