China's central bank said today it would raise the amount of money that lenders must keep in reserve as official concerns persist over inflation and rising housing costs.
The People's Bank of China said it would raise its reserve requirement ratio by 0.50 percentage points, effective May 18 - the fifth such hike this year.
When the new reserve ratio requirement takes effect, China's commercial banks will be required to hold 21% of their deposits in reserve, based on earlier announcements made by the bank.
The move comes one day after the government said the country's consumer price index rose 5.3% year on year in April - a slight easing from March but well above Beijing's official 4% target for 2011.
The politically sensitive inflation reading had hit a 32-month high of 5.4% in March.
Analysts had predicted more tightening measures were on the cards as Beijing tries to rein in rising costs of food and other essentials.
Chinese interest rates have been hiked four times since October, and the central bank raised the reserve requirement ratio six times last year. The last reserve ratio hike took effect on April 21, and the previous rate hike on April 6.
