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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: BillyG who wrote (26480)	12/10/1997 7:09:00 PM
From: John Rieman	Read Replies (1) \| Respond to of 50808

People' Bank of China frees up banking reserves.................................... scene.co.cn Bank Reserves Despite the government's fear of inflation, the People's Bank of China (PBC) is expected to cut the amount of reserves that commercial banks are required to keep in the country's central bank. According to Dai Xianglong, the banks will now be required to keep 10 percent of their reserve deposits with the PBC, compared to 13 percent previously. The new reserve rate will give banks more flexibility and extra funds with which to make loans. "The 13 percent official reserve requirement is too high and will not only adversely affect the ability of China's commercial banks to compete with foreign banks but also will slow foreign banks' expansion in China," said a PBC economist. By cutting the reserve rates, the PBC will allow more than RMB 250 billion to enter the money supply, thus causing inflationary pressures. PBC officials said the risk could be offset by recalling some commercial-bank loans. Since 1988, commercial banks in China had been required to hold around 20 percent of their reserve assets with the central bank (the official 13 percent requirement plus "excess deposit requirements" ranging from 6 to 10 percent), compared to international standards of 4 to 7 percent.