Replies to post #63595 on Options Wonderland

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China Raises Bank Reserve Ratios to Fight Inflation, following Thailand and S. Korea,
China told banks to set aside more deposits as reserves for the fourth time in just over two months, stepping up efforts to rein in liquidity after foreign- exchange holdings rose by a record and lending exceeded targets.

Reserve ratios will increase 50 basis points starting Jan. 20, the People’s Bank of China said on its website today. One basis point is 0.01 percentage point. Interest rates were left unchanged.

Today’s move, adding to the Christmas Day interest-rate increase, underscores Premier Wen Jiabao’s determination to tame inflation that may trigger social unrest. Officials may front- load monetary tightening to the first half of the year after deciding to shift to a “prudent” monetary policy, according to JPMorgan Chase & Co. and Morgan Stanley.
http://www.businessweek.com/news/2011-01-14/china-raises-bank-reserve-ratios-to-fight-inflation.html