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C. Bank issues record 210b yuan in certificates(Xinhua)Updated: 2007-01-17 09:54 The People's Bank of China, China's central bank, issued a record 210 billion-yuan (26.9 billion U.S. dollars) in certificates on Tuesday to draw excess currency from commercial banks. The value of the certificates topped the 170 billion yuan takenfrom the banking pool last week, when the central bank released two batches of bills. The move followed a hike of half a percentage point in the banks' reserve ratio Monday, which was estimated to have taken another 150 billion yuan out of circulation. Analysts say the effort shows the central bank is determined toreduce the country's liquidity, which remains rampant due to the rocketing trade surplus and foreign investment as well as mountingdomestic savings. China's trade surplus last year soared 74 percent to a record 177.47 billion U.S. dollars, while it used more than 63 billion U.S. dollars of foreign direct investment, 4.47 percent up over the previous year. Meanwhile, savings went up by nearly 12 percent year on year to4.93 trillion yuan, prompting the banks to lend a record 3.18 trillion yuan. An interest rate hike was inevitable, as reserve ratio adjustments and open market operations had proved ineffective in curbing excess liquidity, Wu Jinglian, a leading economist, was quoted as saying by Monday's Information Times. So far this year, the central bank has issued certificates fourtimes, with a
combined value of 460 billion yuan. (For more biz stories, please visit Industry Updates)
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