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In order to further implement a stable monetary policy, properly regulate the aggregate amount of monetary credit, and maintain a continuous and stable economic development, the People's Bank of China has decided, upon the approval of the State Council, to elevate the deposit reserve rate as of July 5, 2006. We hereby notify the relevant matters as follows: 1. The deposit reserve rate of 7.5 % which is now applied to the Agricultural Development Bank of China, state-owned commercial banks, joint stock commercial banks, urban commercial banks, rural commercial banks, financial companies, financial lease companies as well as relevant foreign-funded financial institutions shall be changed into 8%. 2. The differential deposit reserve rate of 8% which is now applied to financial institutions according to the requirements of the differential deposit reserve system shall be changed into 8.5 %. 3. The deposit reserve rate of 6 % which is presently applied to urban credit cooperatives shall be changed into 6.5 %. 4. An elevation of 0. 5 percentage point on the deposit reserve rate shall not apply for the time being to the rural credit cooperatives, to which a 6% of deposit reserve rate shall be maintained. 5. An elevation of 0. 5 percentage point on the deposit reserve rate shall not apply for the time being to the rural cooperative banks, to which a 7.5% of deposit reserve rate shall be maintained. The relevant financial institutions shall, according to the requirements of the present Circular, vigorously do well in the relevant work, reasonably adjust their structure of assets and liabilities and intensify their fluidity management. After the deposit reserve rate is elevated, a commercial bank in fluidity difficulties may, according to the relevant provisions, request the People's Bank of China to redeem in advance the instruments of the Central Bank it has held or to buy the bonds it has held so as to make up its deposit reserve. At the same time, the People's Bank of China shall, according to the actual demand in reason, increase its re-loaning or re-discounting so as to maintain a stable growth of the monetary credit. Shanghai Headquarters, all branches and sub-branches of the People's Bank of China shall intensify the administration of the deposit reserve according to the relevant provisions so as to guarantee its smooth implementation. Any emergency arising therefrom shall be reported to the People's Bank of China in a timely manner. Shanghai Headquarters, all branches and sub-branches of the People's Bank of China shall forward the present Circular to the urban commercial banks, rural commercial banks and rural cooperative banks, urban credit cooperatives, financial companies and financial lease companies as well as relevant foreign-funded institutions within their jurisdictions. |
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