PBOC could ease small banks’ RRRs

Author: | Published: 9 Sep 2011

The People’s Bank of China (PBOC) is expected to cut the reserve requirement ratio (RRR) for smaller banks before the end of this year.

China’s central bank last month ordered all commercial banks to include margin deposits in required reserves in a bid to tighten the shadow banking system, as well as to rein in ever-rising inflation and address concerns over local government entities’ risk exposure.

According to the PBOC, renminbi margin deposits - such as letters of credit, bank acceptances and letters of guarantee - totalled Rmb4.4 billion ($689bn) at the end of July, making up 5.7 percent of...