When China lowered the bank reserve ratio, commodities including gold, silver and copper jumped higher.
FORBES: METALS OUTLOOK: Gold Prices Could Continue To Rise Next Week
This leaves only reductions in the bank reserve-requirement ratio.
For example, you didn't mention that the recent interest-rate rise on January 31st followed both an unexpected increase in the cash reserve ratio by the central bank and cuts to import duty on several items by the government in order to check inflation.
Aiming to cut the levels of yuan in circulation, the People's Bank of China is increasing the banking reserve ratio by half a percentage point to 13.5%.
Mr. Chidambaram's comments add support to the view among some investors and analysts that the central bank will also cut banks' cash reserve ratio to help banks tide over the liquidity crunch.
In addition, the People's Bank of China cut its reserve requirement ratio for large banks for the first time since December 2008, following a modest easing for small rural banks last month.
The monetary expansion following an open-market operation involves adjustments by banks and the public. (To find out more, see Formulating Monetary Policy.) The bank in which the original check from the Fed is deposited now has a reserve ratio that may be too high.
The reserve ratio is the percentage of reserves a bank is required to hold against deposits.
"The reserve ratio rise is a signal that the central bank is still in liquidity tightening mode and is very keen to control loan growth, " said a trader at a European bank in Shanghai.
Resource shares supported the Sydney market, and the Australian dollar jumped briefly, after China's Xinhua news agency said the People's Bank of China would boost liquidity via its reserve requirement ratio.
And it is widely predicted that the central bank will soon announce measures to curb credit growth by increasing the ratio of bank deposits that must be kept with it in reserve.
The Fed, ECB, BoJ, BoE, SNB and the Bank of Canada lowered interest rates 50 basis points on dollar swaps, and China lowered its required reserve ratio by 50 bps, the first cut since 2008.
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