China raises reserve requirement ratio by 50 bps
China plans to raise its reserve requirement ratio by 50 basis points with effect from January 20 in its effort to contain inflation.
January 14, 2011 / 16:58 IST
China plans to raise its reserve requirement ratio by 50 basis points with effect from January 20 in its effort to contain inflation.
The pressure on the central bank to contain liquidity was evident after data showed a record USD 199 billion surge in foreign exchange reserves in the fourth quarter to USD 2.85 trillion.China has been battling inflation for a while, with high food and commodity prices. World food prices hit a record high in December after adverse weather affected crops, the UN's food agency said in a report last week that raised concerns about inflation, protectionism and social unrest -- factors that contributed to the 2008 food crisis.Chinese officials have warned that monetary policy will be less effective because of excessive liquidity in global financial markets stemming from monetary easing in the United States. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
