A third increase in the reserve requirement rate is expected to freeze more than $300 billion

More than 300 billion analysts are expected to freeze bank funds in the near future, the PBOC announced May 2, 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 do not raise.　　This is the third time this year that the central bank raised the reserve requirement ratio. Previously, the central bank raised the reserve requirement ratio on January 18 and February 25 respectively.　　After the increase, the statutory reserve ratio for large financial institutions will reach 17%. Analysts say the increase in reserve requirements is expected to freeze bank funds by more than 300 billion yuan.　　The central bank's move is aimed at tightening the banking system's liquidity, preventing inflation and overheating risks. Lu Commissar, a senior economist at Societe Generale, said the reserve ratio could be a hedge against the liquidity generated by the growth of foreign exchange accounts due to the expected appreciation of the renminbi.　　The rapid growth of foreign exchange accounts is mainly due to the increasing willingness of the main economic entities. Previously, the 3-year central vote in the yield decline of 1 basis points, the circulation still reached 100 billion yuan.　　Lu Commissar thinks, may be because the 3-year central vote is much sought after, the bank feels market liquidity is still quite abundant, so raise reserve requirement ratio.　　In the first quarter of 2010 China's macroeconomic situation analysis, the central bank put forward "efforts to stabilize the overall price level" in more than a year.　　China's manufacturing Purchasing Managers ' Index (PMI), which was 55.7% in April, has remained above 50% for 14 months, according to data released by the China Logistics and Purchasing Federation, suggesting that China's economy is moving towards a stable and fast-growing trajectory and inflationary pressures are mounting.　　Looking forward to the follow-up monetary policy, Shusong, deputy director of the Financial Research Institute of the Development Research Center of the State Council, said the increase in reserve requirements would be an alternative to interest rate hikes and would weaken the likelihood of a short-term rate hike. Lianping, chief economist at Bank of communications, also said there is little likelihood of a short-term rate hike. On the one hand, interest rate adjustment has great influence on capital mobility, because of the existence of spreads, China's interest rate hike will lead to a large influx of foreign capital; On the other hand, China's economy has just rebounded, corporate profitability has not fully recovered, at this time, the use of interest rate means, will lead to In addition, the interest rate hike needs to consider multiple factors such as price, asset price and RMB appreciation.