From The Wall Street Journal:
China’s central bank plans to tighten monetary policy next month as it struggles to prevent the economy from overheating, but this time it will target foreign-currency deposits, according to an internal document issued by the People’s Bank of China.
According to the document, seen by Dow Jones Newswires, the central bank will raise the foreign-currency deposit reserve ratio for domestic and foreign commercial banks to 4% from 3%, effective Sept. 15.
The move, although modest, is the fifth tightening measure by the central bank this year and follows two increases in interest rates and two rises in commercial banks’ yuan reserve ratio. The foreign-currency deposit reserve ratio still remains far lower than that for yuan deposits, which rose to 8.5% on Aug. 15.[Full Text and Subscribors Only]
