Banking experts said the central bank may raise Chinese commercial banks' required reserve ratio to tame surging domestic liquidity and inflation, China Securities Journal reported Wednesday.; D3 i* {5 g3 b3 j0 |1 A
According to Bank Communication Analyst E Yongjian, the current situation does not allow for a higher interest rate, so the rises in reserve requirement are necessary. The increase could be implemented in four separate rises of 0.5 percentage points each, the newspaper reported.
% x9 H: N1 h+ M; d4 \! w% o% l Agricultural Bank of China representatives predicted the required reserve ratio could increase by 150 to 250 basis points in total, in three to five separate rises, the report said.
5 S& I- R% G6 A- |* M Some experts say the required reserve ratio may be raised slightly as hikes in interest rates are still necessary to relieve pressure caused by inflation.
- O. S7 U# Y% C5 ~9 H! l In December 2010, the M2 increased 19.7 percent year-on-year, and the new yuan-denominated lending increased by 480.7 billion yuan, driving new loan totals last year to 7.95 trillion yuan, according to data from the People's Bank of China. |