The People's Bank of China, the country's central bank, on
Tuesday issued one-year central bank bills worth 31 billion yuan
(US$4.2 billion) at a yield of 4.0583 percent.
Primary dealers, such as commercial banks, securities firms,
insurance companies and other financial institutions approved by
the central bank, purchased the bills.
A record 1.27 trillion yuan (US$173.97 billion) of central bank
bills, which had been issued to commercial banks to curb lending,
will mature in the first quarter, according to government
figures.
The central bank announced last Wednesday that it would raise
the bank reserve requirement ratio by half a percentage point to 15
percent on January 25, the first rise this year following ten such
moves last year as China sought to ease excess liquidity.
Experts said that despite the requirement ratio being at a
24-year high, the central bank still had room to raise it
further.
The country's foreign exchange reserve reached US$1.53 trillion
at the end of 2007, up 43.3 percent from a year earlier. The record
reserve may add to the liquidity problem as it pumps more cash into
circulation.
(Xinhua News Agency January 23, 2008)
