Economy

China raises reserve ratio by 50 basis points

(Xinhua)
Updated: 2011-02-18 20:05

BEIJING - The People's Bank of China, the central bank, announced Friday a rise in the bank reserve requirement ratio of 50 basis points from Feb 24.

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The hike, the second this year and the eighth since the beginning of last year, is the latest move to soak up liquidity to check inflation.

After the hike, major banks will have to set aside 19.5 percent of their reserves and small and medium-sized banks will have to keep 16 percent of their deposits in reserve.

China's consumer price index (CPI), a main gauge of inflation, rose 4.9 percent in January, higher than 4.6 percent in December.