A 0.5% increase in reserve requirements is a significant disincentive to property bubbles

According to the Xinhua news agency, the Guangzhou Daily reported that the People's Bank of China May 2 announced that from May 10 onwards, the increase in deposit-type financial institutions RMB deposit reserve ratio of 0.5%, rural credit cooperatives, village and township banks are not up, this is the third time in China this year to increase the reserve requirements ratio.　　It is reported that after the adjustment, the reserve ratio of large banks will be 17%, from the peak of the history of 17.5% only a step away, equivalent to the recovery of 250 billion yuan flow.　　Analysts at the CBRC pointed out that since the increase in reserve requirements and interest rate increases have an alternative effect, the original should be in April, the rate hike will be postponed to July or even later. Raising the reserve requirement ratio on the property market is very obvious, because the housing lending after several housing tightening policy has been very tight, the increase in reserve requirements to make the bank's loan space is smaller, can be less loans, the property market capital is more "dry ze." "China's current bank deposits are nearly 50 trillion, the increase of 0.5% of the reserve requirement ratio, the equivalent of the Bank's credit window can be reduced by 250 billion yuan, in other words, the market liquidity will be reduced by 250 billion yuan." The government's move is aimed at preventing inflation, although inflation is not a problem at the moment. "Liu Shangxi, deputy Director of Finance Science Institute of China's Ministry of Finance, said in an interview. Xinyu, a researcher at the Ministry of Commerce, said the increase in reserve ratios helped cool the overheated economy and the most obvious inhibitory effect on property bubbles.