金融英语阅读：China to lift bank reserve ratio
BEIJING, Dec. 10 (Xinhua) -- China's central bank Friday announced the third increase of the reserve requirement ratio (RRR) for banks in a month to curb runaway lending amid accelerating inflation.The People's Bank of China (PBOC) said on its website that it would lift the bank reserve requirement ratio by 50 basis points from Dec. 20.
Banks will have to set aside 18.5 percent of their reserves after the sixth such hike this year.
PBOC data showed new yuan loans hit 564 billion yuan (85.45 billion U.S. dollars) in November. That means the full-year lending total would exceed the 7.5-trillion-yuan target set at the start of the year. This could complicate the government's management of inflation, which rose to a 25-month high of 4.4 percent in October.
To curb runaway liquidity, the central bank raised the benchmark lending and deposit rates by 25 basis points on Oct. 20.
Analysts said the latest reserve requirement ratio increase could take about 300 billion yuan from the banking system.
Liu Qiyuan, an analyst with the Jinan-based Qilu Securities Co., Ltd, said the latest move indicated the previous anti-inflation moves were inadequate. More tightening moves are expected in the near future.
An RRR hike was an effective way to soak up excess liquidity without attracting speculative money inflows as an interest rate rise would, said Yang Sente, an analyst with the Changsha-based Xiangcai Securities.
But considering the long-term effect, another interest rate hike was still possible in December, he said.
Worries about imminent rates hikes have driven down China's stock market by almost 7 percent from the beginning of November.
On Dec. 3, the government announced that its monetary policy stance would move from relatively loose to prudent next year to tackle rising inflation and keep economic growth at a sustainable pace.
The government has also announced harsh measures, including price controls when necessary, and has intensified a crackdown on hoarding by threatening speculators with fines of up to 5 million yuan to prevent runaway price hikes.
Although prices of commodities from soybeans to cotton have fallen significantly, analysts have estimated consumer inflation picked up in November. The official monthly figures will be announced Saturday.
"It is very likely the Consumer Price Index (CPI) will exceed 5 percent in November, a 28-month high," said Zhu Jianfang, an analyst with Citic Securities.
The government started its annual Central Economic Work Conference on Friday, which would set the tone for the economic work in 2011. Curbing inflation and economic restructuring was expected to be high on the agenda.
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