Banks' reserve requirement raised

China’s central bank has raised domestic banks’ reserve requirement ratio by half a percentage point, Reuters reported. The new ratio of 15% will come into effect on January 25. The People’s Bank of China (PBOC) has increased the ratio 11 times since the start of 2007. The PBOC said it raised the proportion of deposits that banks must keep in reserve to slow money supply and credit growth and to strengthen liquidity management. The last increase, by one percentage point, was announced on December 8. The central bank is trying to reduce liquidity in the banking system. It raised interest rates six times in 2007.