Mon, 05/12/2008 - 17:34

China raises bank reserve ratio by 0.5 pct points to 16.5 pct

Shanghai. May 12. INTERFAX-CHINA - The People's Bank of China (PBOC), the country's central bank, announced today that it will raise the bank reserve ratio by 0.5 percentage points to 16.5 percent, effective May 20.   

The move is designed to further enhance control over banking system liquidity and restrain the excessive growth in bank loans. Today's announcement marks the 16th bank reserve increase since June 2006, when the bank reserve ratio was lifted 0.5 percentage points to 8.0 percent, as well as the fourth increase this year alone.

Despite the government's aims to control this year's consumer price index growth to around 4.8 percent, the country's CPI surged 8.5 percent year-on-year in April, and increased 8.2 percent year-on-year over the first four months of this year, China's National Bureau of Statistics (NBS) announced today.

The PBOC previously raised the bank reserve ratio by 0.5 percentage points to 16 percent on April 25, 2008.   

-JJ 

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