China Just Raised Its Reserve Requirements Once Again

Heads up: The only central bank that matters anymore, the PBOC, just hiked reserve requirements once again.

Bloomberg: The reserve requirement will increase 50 basis points effective Feb. 25, the People’s Bank of China said on its Web site today. The current level is 16 percent for big banks and 14 percent for smaller ones.

China’s policy makers aim to avert asset bubbles and restrain inflation after flooding the economy with money last year to drive the nation’s recovery from the first global recession since World War II. The central bank said yesterday that it wants to gradually normalize monetary conditions from a “crisis mode” after gross domestic product expanded a more- than-forecast 10.7 percent in the fourth quarter from a year earlier, the fastest pace in two years.

Meanwhile, along with expectations that Australia is about to raise rates again, it seems the tightening cycle is back in earnest.

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See Also:

• Is The US-China Relationship Now Fraying By The Day?
• What Tightening? Chinese Property Accelerates Higher As Money Supply Explodes
• The Tightening Cycle Is About To Begin Again, And It Will Start In Australia

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