China's central bank demanded from lenders to raise their deposits starting June 20 by 0.5%. This increase in the reserve ratio is the sixth such decision this year. Now big banks will be obligated to set aside a record 21.5% of the deposits as reserves at the central bank.
Inflation remains a top priority in China, and this decision comes hours after China released its CPI report which indicated inflation rose by 5.5% in May, the fastest in almost tree years. this decision was taken in an attempt to limit liquidity and keep inflation in the second largest economy under control.