China Raises Reserve Requirements to Fight Inflation

China increased reserve requirements at banks in a bid to control inflation and head off a potential credit bubble.

State-owned banks must set aside an extra 0.5% of deposits as reserves, starting Nov. 29. That means some lenders could be setting aside as much as 19% of deposits, The Associated Press said.

It's the second time this month that China has ordered banks to hold bank more reserves. Inflation hit 4.4% in October, the highest in more than two years. The official target for inflation is 3%

Chinese officials are worried about the impact of high inflation on poor families that spend as much as half their incomes on food.

Growth in the world's second-largest economy hit an annual rate of 11.9% in the first quarter of this year, before falling to 9.6% in the third quarter.
Read Full Story

Markets

NASDAQ 6,936.58 80.06 1.17%
S&P 500 2,675.81 23.80 0.90%
DJIA 24,651.74 143.08 0.58%
NIKKEI 225 22,553.22 -141.23 -0.62%
HANG SENG 28,848.11 -318.27 -1.09%
DAX 13,103.56 35.48 0.27%
USD (per EUR) 1.18 0.00 0.06%
USD (per CHF) 0.99 0.00 0.00%
JPY (per USD) 112.58 0.02 0.01%
GBP (per USD) 1.33 0.00 0.01%

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.