China Increases Bank Reserve Requirements A Third Time for 2010

As of May 10, China will increase the reserve ratio requirement for banks 50 basis points. Currently, the biggest banks must maintain a 16.5% reserve ratio while smaller banks must maintain 14.5%.

Bloomberg reports that this third increase for the year may still prove inadequate to tame China’s inflation threat. Chinese officials continue to reassure markets that monetary tightening targets rampant speculation in real estate and that policy remains accommodative for the rest of the economy.

Advertisements