China Raises Reserve Requirements to Cool Inflation

For the fifth time this year, the People’s Bank of China has increased the minimum cash levels all lenders must maintain in reserves. This tightening of the availability of capital is an attempt to restrict lending and slow the rate of inflation within the red-hot economy.

This recent move adds to the speculation that the Central Bank will be forced to increase interest rates again after raising them in October for the first time since 2007.

Source: BBC News

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