BEIJING (AP) — China has ordered its banks raise the amount of money they hold in reserves in another move to curb lending and cool a spike in inflation.
The People’s Bank of China said Friday that banks must raise reserves by 0.5 percent of deposits. This is the third such move this year by the central bank and follows six reserve increases in 2010.
Reserves vary by institution but are about 20 percent for China’s biggest state-owned lenders.
Beijing is using a series of repeated, gradual hikes in interest rates and reserve levels to stanch a flood of lending that helped China rebound quickly from the global crisis but now is fueling pressure for prices to rise.
