BIZCHINA> Recent Adjustments
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BIZCHINA> Recent Adjustments
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Banks tighten grip on property loans, 03/2005
By Zhang Dingmin (China Daily)
Updated: 2005-03-17 05:54 Real estate investment slowed down last year, but the continued uptrend in prices "need close attention," the central bank said in its 2004 fourth quarter monetary policy report, released last month. Nine cities reported property price increases heftier than 9 per cent last year, includingShanghaiand Nanjing of East China'sJiangsuProvince. The PBOC also announced yesterday its decision to reduce the annual interest rate on excess bank reserves, which banks keep besides required reserves basically to meet payment needs, to 0.99 per cent from 1.62 per cent previously. The rate cut "will help commercial banks further improve their efficiency in fund use and liquidity management, and will promote the liberalization of the interest rate regime," the PBOC said in a statement. Wang said the move is aimed more at pushing the banks to lend more to businesses, many of which - particularly the smaller ones -, are feeling liquidity difficulties partly as a result of the ongoing macro management. China took a slew of measures as early as the second half of 2003 to curb the rapid growth in bank loans and fixed investment, which gave rise to worries about overheating. "Liquidity is already on the tight side (among businesses)," Wang said. The central bank has scaled down its money supply growth target for this year to 15 per cent from last year's 17 per cent. The growth of broad money supply slid to 13.9 per cent at the end of February from 14.1 per cent one month earlier, which some economists worry is a bit too slow to support this year's 8 per cent economic growth target. (For more biz stories, please visit Industries)
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