Chinas central bank reduces CRR rate

The central bank said that commercial banks would be allowed to keep a slightly lower percentage of their deposits as reserves at the central bank. The change,which will take effect on December 5,means that commercial banks will have more money available to lend,which could help to rekindle economic growth and a slumping real estate market.

Real estate developers,small businesses and other borrowers have been complaining strenuously in recent weeks of weakening sales and scarce credit. Prices have dropped up to 28 per cent for new apartments in some Chinese cities this autumn,and export orders have slumped.

Monetary policy changes are made not by the countrys central bank but by the State Council,the countrys cabinet. Shifts in the broad direction of policy are usually made only with the approval of the Standing Committee of the Politburo of the Chinese Communist Party.