China to raise banks’ reserve ratio again

March 19th, 2011 - 3:38 am ICT by IANS  

Beijing, March 19 (IANS) China’s central bank said Friday it will raise the banks’ reserve requirement ratio by 50 basis points from March 25 - the third hike this year.

This will be the ninth reserve requirement ratio hike by the People’s Bank of China since 2010. The latest move is to soak up liquidity to check inflation, China Daily reported.

As per the new plan, major banks will have to set aside 20 percent of their reserves and small and medium-sized banks will have to keep 16.5 percent of their deposits in reserve.

China’s consumer price index (CPI), a main gauge of inflation, rose 4.9 percent in February.

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