China raises deposit reserve requirement by 0.5%

China’s central bank decided on Tuesday to raise the deposit reserve requirement ratio of commercial banks to a record high of 15.5 percent, the second such move this year.

The move was to further strengthen regulation of liquidity in the banking system and lead bank loans to increase in a reasonable way, said a statement on the website of the People’s Bank of China (PBOC

It echoed Premier Wen Jiabao’s talks at a press conference Tuesday that the government would tackle soaring prices and mounting inflationary pressure.

In his government work report to the National People’s Congress, Wen said the task of holding down inflation was "difficult".

"The current price hikes and increasing inflationary pressures are the biggest concern of the people," he said.

In its bid to contain rising inflation, the central bank has raised the reserve requirements 12 times and the interest rates six times since last year.

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