policy-tightening-pervades-the-first-working-week-of-the-year-of-the-tiger

Policy tightening pervades the first working week of the year of the tiger

Chinese authorities have shown a strong will to tighten capital markets by raising reserve requirement ratios twice in a month, but specialists say it's an insufficient effort.

In China, the first working week after the Lunar New Year holiday normally sets the tone for the rest of the year. It is obvious that this year is going to be a year of tighter monetary policies.

Chinese authorities have shown a strong will to tighten capital markets. The People's Bank of China PBoC, the nation's central bank, raised the reserve requirement ratio RRR by another 0.5%, with effect yesterday, which will erase more than Rmb300 billion worth of liquidity, analysts estimate.

It was the second RRR hike within a month and is targeted at slowing down credit growth -- the major source of income for Chinese banks,...

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