From Reuters via International Herald Tribune:
An increase in Chinese bank reserve ratios to a record high may flatten the yield curve while bringing closer a pullback in the soaring stock market, traders and analysts said Sunday.
The central bank announced Saturday that it was raising reserve ratios for the eighth time this year, starting Oct. 25. The half-percentage point increase takes the ratio for big banks to 13 percent – matching the record rate that applied from September 1988 to March 1998. Analysts said that the raise, in line with market expectations, was a signal to commercial banks that the central bank remained determined to restrain growth in money supply and bank lending. [Full Text]
