InnoNation Reloaded

Experts on Chinese monetary policy said that the higher reserve requirement by itself would have little effect on Chinese banks. They pointed out that the new rules would only require Chinese commercial banks to keep an extra $19 billion worth of Chinese currency with the central bank. By comparison, the banks are receiving almost all of the $18 billion to $20 billion in foreign currency flowing into China each month, and are converting that foreign currency into Chinese currency.