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China adjusts rules on calculating bank reserves

Updated: Jun 3,2016 9:46 PM     Xinhua

BEIJING — China’s central bank announced on June 3 it will change the rules for assessing bank’s reserve requirement ratios (RRR) to help banks better manage liquidity.

As of July 15, the RRR calculation will be based on the arithmetic average of daily outstanding deposits in a certain period, said a statement by the People’s Bank of China (PBOC).

The move aims to improve the flexibility of banks’ liquidity management and avoid money market fluctuations, according to the statement.

Since 1998, the PBOC has required commercial banks to meet an official RRR to fend off financial risks.

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