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PBOC to Raise Reserve Ratios for Banks That Don't Meet Criteria

  • Banks made a record 2.51 trillion yuan of new loans in January
  • PBOC says action isn't driven by the speed of lending
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Is the PBOC Successfully Managing China’s Slowdown?

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China’s central bank said some banks will be forced to lock away more reserves, a move that may contain credit growth after advances by smaller lenders jumped in January.

Some banks no longer meet criteria for preferential reserve requirement ratios and will have those levels increased, the People’s Bank of China said Friday in a statement. Prior to the announcement, Bloomberg News reported that some lenders will face a higher ratio as officials seek to limit the risks associated with last month’s jump in credit. The PBOC said its action wasn’t driven by the speed of lending.