Old tools not enough to bring down inflation

On May 12, the National Bureau of Statistics announced the Consumer Price Index (CPI) growth in April reached 8.5 percent year-on-year, 0.2 percentage point higher than in March. On the same day, the People's Bank of China raised the reserve requirement ratio by half a percentage point.

Effective from May 20, the reserve requirement ratio, the proportion of money banks must set aside in reserves, is pushed to 16.5 percent. The fourth increase of the year, it is a quick response to the high CPI growth, an indicator of the inflation level.

The April CPI of 8.5 percent is only slightly lower than February's 12-year record high of 8.7 percent and the deposit reserve ratio is already at a historic peak.