Bank reserve ratio raised to curb lending

The central bank yesterday raised the reserve requirement ratio - the proportion of deposits that banks must hold in reserve - in a clear sign that it was determined to drain excessive liquidity in the market and curb lending.

The 0.5 percentage point increase is effective Jan 18, the People's Bank of China (PBOC) said. It was the first time that the central bank raised the ratio since June 2008.

The move is meant to stabilize loan growth but keep overall policy pro-growth, Reuters quoted a central bank official as saying.