The selective reduction in banks'.......>

CHINA PRESS: The selective reduction in banks' reserve requirement ratios (RRR)

announced by the People's Bank of China on Sept. 30, to be implemented as of

Jan. 1, is just a fine-tuning of current monetary policy, not a broad-based RRR

cut, the Financial News, a journal run by the PBOC reported Monday, citing

analysts. Monetary policy will be more targeted and focused on structural

adjustments, the report said. The proportion of wholesale funding in financial

institutions' liabilities has risen because small and medium-sized banks and

non-bank institutions have to get liquidity from big banks in an indirect

manner, the report noted, adding this RRR cut will effectively guide banks to

optimize their liability structures. But the move would not inject as much

liquidity as expected, the report stated. According to the PBOC statement, there

will be two levels of RRR cut: at present, 98% of financial institutions will

qualify for the 50 basis-point reduction, the report said, and will release

hardly any new liquidity. The additional 100 basis-point reduction for qualified

banks will only apply to a few institutions, the report said. (Financial News)