China's central bank announced on Monday that it would raise the reserve requirement ratio for commercial banks by 0.5 percentage point to curb the rising inflation.
This is the fourth such move so far this year, and it will lift China's reserve requirement ratio to a new high of 16.5 percent as of May 20.
"The rise is aimed at strengthening liquidity management in the banking system and steering bank credits to grow reasonably," the People's Bank of China (PBOC) said in a statement.
The PBOC raised the reserve requirement ratio on Jan. 25, March 25 and April 25, respectively, on top of 10 such moves in 2007. It also raised interest rates six times last year.
The new tightening measure was unveiled on the same day when the National Bureau of Statistics said on Monday morning the country's inflation rate hit 8.5 percent in April, only slightly lower than the nearly 12-year-high of 8.7 percent in February.
(Xinhua News Agency May 12, 2008)