China's central bank said yesterday it was boosting the amount of money its banks must hold in reserve for the eighth time this year, reducing the amount available for lending in an effort to cool an investment boom.
The bank said in a statement on its Web site it had raised the rate by half a percentage point to 13 percent to "strengthen liquidity management in the banking system and check the excessive credit growth."
The People's Bank of China said the change will take effect tomorrow.
The order, which had been expected by industry analysts, came on top of repeated interest rate hikes and investment curbs imposed on real estate, auto manufacturing and other industries in an effort to cool down a boom that Chinese leaders worry could ignite inflation or a financial crisis.
The rate rise also follows the recent release of government figures on inflation.
The inflation rate jumped 6.5 percent in August -- its highest monthly rate in 11 years -- propelled by a double-digit rise in food prices, including pork, the country's staple meat.
China said on Friday that the trade surplus, a key source of domestic liquidity, had remained high at US$23.91 billion last month.
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