The People’s Bank of China has increased the reserve requirements among local banks as part of the government’s efforts to prevent consumer prices in the country from rising. The bank’s directive, which increases the volume of shares a bank must hold in reserve and, therefore, curbing its lending capacity, is the fourth such move the government has taken this year. It followed the release of new data showing that the country’s consumer price index increased by 5.4 percent, the Wall Street Journal says. By increasing banks’ reserve requirements, the Chinese government hopes to address inflation by slowing down the entry of new credit into the economy, the news agency adds.
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About the author
Ivy Mungcal
As former senior staff writer, Ivy Mungcal contributed to several Devex publications. Her focus is on breaking news, and in particular on global aid reform and trends in the United States, Europe, the Caribbean, and the Americas. Before joining Devex in 2009, Ivy produced specialized content for U.S. and U.K.-based business websites.
