China plans to temporarily waive a requirement for banks to set aside reserves for some deposits, people with knowledge of the matter said, highlighting efforts to boost lending amid a slowdown of the world’s second-largest economy.
Commercial lenders will not be required to set aside reserves for the savings that they hold for non-deposit-taking financial institutions, the people said.
The waiver is part of planned changes to how banks’ loan-to-deposit ratios are calculated, said the people, who asked not to be identified because they were not authorized to discuss the plan publicly.
The waiver is seen as another move to replace a universal reserve requirement ratio cut that the People’s Bank of China (PBOC) needs to boost credit and bolster the economy.
Concerned that a broad reduction might send out a strong easing signal and bring turmoil to the stock market, China’s central bank has added liquidity by stealth at least four times in the past four months.
Chinese stocks rose the most in three weeks on Thursday. Industrial & Commercial Bank of China Ltd (中國工商銀行) and China Construction Bank Corp (中國建設銀行), the largest lenders, advanced at least 3 percent after China Business News and Market News International reported the waiver earlier.
This waiver follows a planned loan-to-deposit rule change reported last month that would let banks classify savings they hold for non-deposit-taking financial institutions as deposits, a government official briefed on the matter said last month.
Chinese banks are allowed to lend a maximum of 75 percent of deposits and are required to set aside 20 percent as reserves.
The change may add 7 trillion yuan (US$1.1 trillion) of money to be classified as deposits, according to a report last month by Huang Jie (黃潔), a Beijing-based analyst at China International Capital Corp (中金公司).
Huang also wrote, before reports about the waiver, that the PBOC might cut reserve requirement ratios twice as a result of the change in calculating loan-to-deposit ratios.
The central bank may cut banks’ required reserve ratio by a total of 1 percentage point in the first half, according to economists surveyed by Bloomberg from Dec. 18 to Tuesday.
PERSISTENT RUMORS: Nvidia’s CEO said the firm is not in talks to sell AI chips to China, but he would welcome a change in US policy barring the activity Nvidia Corp CEO Jensen Huang (黃仁勳) said his company is not in discussions to sell its Blackwell artificial intelligence (AI) chips to Chinese firms, waving off speculation it is trying to engineer a return to the world’s largest semiconductor market. Huang, who arrived in Taiwan yesterday ahead of meetings with longtime partner Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), took the opportunity to clarify recent comments about the US-China AI race. The Nvidia head caused a stir in an interview this week with the Financial Times, in which he was quoted as saying “China will win” the AI race. Huang yesterday said
Japanese technology giant Softbank Group Corp said Tuesday it has sold its stake in Nvidia Corp, raising US$5.8 billion to pour into other investments. It also reported its profit nearly tripled in the first half of this fiscal year from a year earlier. Tokyo-based Softbank said it sold the stake in Silicon Vally-based Nvidia last month, a move that reflects its shift in focus to OpenAI, owner of the artificial intelligence (AI) chatbot ChatGPT. Softbank reported its profit in the April-to-September period soared to about 2.5 trillion yen (about US$13 billion). Its sales for the six month period rose 7.7 percent year-on-year
Nissan Motor Co has agreed to sell its global headquarters in Yokohama for ￥97 billion (US$630 million) to a group sponsored by Taiwanese autoparts maker Minth Group (敏實集團), as the struggling automaker seeks to shore up its financial position. The acquisition is led by a special purchase company managed by KJR Management Ltd, a Japanese real-estate unit of private equity giant KKR & Co, people familiar with the matter said. KJR said it would act as asset manager together with Mizuho Real Estate Management Co. Nissan is undergoing a broad cost-cutting campaign by eliminating jobs and shuttering plants as it grapples
MORE WEIGHT: The national weighting was raised in one index while holding steady in two others, while several companies rose or fell in prominence MSCI Inc, a global index provider, has raised Taiwan’s weighting in one of its major indices and left the country’s weighting unchanged in two other indices after a regular index review. In a statement released on Thursday, MSCI said it has upgraded Taiwan’s weighting in the MSCI All-Country World Index by 0.02 percentage points to 2.25 percent, while maintaining the weighting in the MSCI Emerging Markets Index, the most closely watched by foreign institutional investors, at 20.46 percent. Additionally, the index provider has left Taiwan’s weighting in the MSCI All-Country Asia ex-Japan Index unchanged at 23.15 percent. The latest index adjustments are to
RSS