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 (5.2 trillion U.S. dollars).
China's commercial banks lent out 3.36 trillion yuan in the first nine months, surpassing the full-year figure of 2006.
Source: Xinhua
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