China will raise the reserve requirement ratio by half a
percentage point for commercial banks in an effort to cool the
booming economy, the People's Bank of China said Saturday.
The move, which will take effect from Nov. 26, will push the
ratio to a ten-year high of 13.5 percent.
It is the ninth hike this year aimed at "strengthening liquidity
management in the banking system and checking excessive credit
growth", the central bank said in a statement posted on its Web
site.
The move came shortly after the central bank announced earlier
this week its prediction that China's economy would expand more
than 11 percent for the whole of 2007, with inflation rising 4.5
percent.
To ensure rational credit growth, the central bank also said it
would continue to implement a tightened monetary policy and take a
variety of measures to strengthen the macro-control.
By the end of September, the M2, which covers cash in
circulation plus all deposits, grew by 18.45 percent from a year
ago to 39.3 trillion yuan (US$5.2 trillion).
China's commercial banks lent out 3.36 trillion yuan in the
first nine months, surpassing the full-year figure of 2006.
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(Xinhua News Agency November 11, 2007)
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