China likely to further cut reserve requirements next year

China will further cut reserve requirements in 2012 to pump liquidity into the country\'s banking system, but that will not indicate a shift in the country\'s monetary policy, a senior official said Sunday. Wu Xiaoling, a former deputy governor of the People\'s Bank of China, the country\'s central bank, said at a forum that China will use the tool of reserve requirements more frequently in macroeconomic regulations next year. \"China will cut reserve requirements to replenish liquidity if the country\'s yuan funds outstanding for foreign exchanges rise slightly or even fall in 2012,\" Wu said. As of the end of November, the nation\'s total yuan funds outstanding for foreign exchanges stood at 25.46 trillion yuan (4 trillion U.S. dollars), down 27.9 billion yuan from the figure at the end of October, central bank data showed. Early in December, China cut reserve requirements for commercial lenders for the first time in three years. The cut dropped the reserve requirement ratio to 21 percent for large commercial banks and 17.5 percent for mid- and small-sized banks.