China 2011 4th raises banks' required reserve ratio
BEIJING - China's central bank announced Sunday it would raise the required reserve ratio of the country's lenders by 50 basis points from Thursday, the fourth time this year.
The move would raise the required reserve ratio for China's large financial institutions to a record high of 20.5 percent, which means they have to lock up 20.5 percent of their deposits as reserves.
The tightening measure has been widely expected after the government said Friday the consumer price index (CPI), a main gauge of inflation, had reached a 32-month high of 5.4 percent in March.
The move came a day after the PBOC governor Zhou Xiaochuan said "China will continue tightening monetary policy for some time" on the sidelines of the Boao Forum for Asia in south China's Hainan Province.
China has also raised the benchmark interest rates four times since last October to battle the persistent inflation.
Premier Wen Jiabao said earlier this month during an inspection tour in the eastern Zhejiang Province that the government would use tools including open-market operation, required reserve ratios, interest rates, and the exchange rate to eliminate monetary basis for inflation.