The People's Bank of China said Friday it would increase reserve requirements by 0.5 percentage points to 8.5% of total deposits for big state banks and joint-stock banks, and to 9% for smaller banks, including urban credit cooperatives, from August 15. It is the second time in five weeks that the central bank has raised the reserve requirement and comes days after China announced its economy expanded 11.3% in the second quarter of this year, up from 10.3% in the first quarter and its fastest growth in more than a decade. In June, the central bank raised reserve requirements by the same margin. That followed a 0.27-percentage-point increase in bank lending rates in April to 5.85% from 5.58%. On Friday, the yuan hit its highest level against the dollar since its one-time appreciation of 2.1% exactly one year ago, peaking at 7.9815 to the dollar on over-the-counter trading.
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