China's central bank announced that it raised the reserve ratio for commercial banks from 7% to 7.5% effective April 25. The People's Bank of China (PBOC) said that some banks that fall below the average capital adequacy ratios for China's commercial banks will have to meet a reserve ratio of 8%. Analysts said the move by the PBOC to tighten monetary policy is aimed at tapping the brakes on China's economy as inflation fears are fuelled by increasing commodities imports. Imports grew 42% to US$124.1 billion in the first quarter of this year, according to China's customs bureau.
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