The People's Bank of China decided to raise the bank reserve ration by 50 basis points effective May 10, as the bank is trying to face the accelerating inflation and the surging property prices that is threatening recovery in the world's third largest economy.

The reserve ratio is currently 16.5% fir the biggest banks and 14.5% for smaller banks. Despite the central bank is working to face inflationary pressures, the Finance Minister Xie Xuren said policy makers are committed to expansionary polices to support the economy.