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In the last two months, the PBOC has frequently resorted to bills issuance to soak up excessive liquidity. It has achieved net capital withdrawal for nearly 10 consecutive weeks since February.
Wang estimated a total amount of 1.1 trillion yuan (161 billion U.S. dollars) in liquidity had been drained by PBOC in the past 10 weeks through OMOs, equivalent to about three hikes of RRR by half a percentage point each time.
Wang Han, another Hong Kong-based analyst with Guotai Junan Securities, said Sunday's PBOC move "came a bit later than expected, while it still met our RRR rise expectation."
Wang estimated that the RRR hike would lock about 300 billion yuan among major Chinese mainland's banks.
Tao Dong, chief regional economist at Credit Suisse Group Credit based in Hong Kong, also said the PBOC move fell within expectation and he estimated 320 billion yuan of liquidity would be locked as a result of the RRR hike.
According to Morgan Stanley's Wang, the RRR hike should be seen as "part of PBOC's ongoing liquidity management effort."
He said the RRR hike is likely to have a stronger impact in the financial market than 0MOs, but it will not affect Chinese banks' capacity to extend loans.
"And the annual loan target (of China's entire banking sector) remains unchanged at 7.5 trillion yuan for this year," Wang said. Earlier this year, the Chinese government set the target of 7.5 trillion yuan of new loans in 2010.