December 11, 2007
China’s Reserve Ratio — Ten Year View
China Tells Banks to Raise Reserves to Cool Economy
“Lenders must put aside 14.5 percent of deposits as reserves, starting Dec. 25, up from the previous 13.5 percent, the People’s Bank of China said today on its Web site. The ratio is the highest since at least 1987 when the data began and the increase is twice as much as the nine others this year.”
Here’s a look at the reserve ratio over the last ten years.
Cat: | Time: 8:47 am (utc+8)
December 11th, 2007 at 9:34 am
Chairman,
Do you have the chart going back to 1987? I read on Bloomberg the other day that the reserve requirement of today is the highest it’s been since 1987. Everybody’s talking about inflation now, and the parallel between today and 1987 is interesting in that the… those big 1989 riots I keep hearing about were sparked by an accumulation of food inflation.
December 11th, 2007 at 10:07 am
Cartman: I do have the chart going back to 1987 but it’s easier to describe it since there was so little change in the reserve ratio back then: it was 13% from where the chart above starts all the way back to September 1, 1988 … before then it was 12% back to Jan. 1, 1987 (our first data point).
The protests in 1989 were partly sparked by food inflation (so I’ve heard) … I’ll post some interest rate charts later which might also be fun to look at.
December 11th, 2007 at 11:28 am
Hi CM, would you know how this rate compare to the reserve requirements in the States? Or in Europe?
December 11th, 2007 at 11:34 am
Cedric: I don’t know about Europe but you can read about the reserve requirements in the US here.