China's central bank raised the bank reserve ratio by half a percentage point on Tuesday after the government reported a 34-month high of 5.5 per cent in consumer-price inflation in May, according to DPA. The People's Bank of China said it would require commercial banks to maintain a reserve ratio of 21.5 per cent from June 20, following the ninth rise in the ratio since October. Inflation has persisted despite a fall in bank lending last month following the previous increases in the bank reserve ratio and four interest rate hikes since October. The year-on-year rise of 5.5 per cent in the monthly consumer price index in May increased pressure on the government to take more measures to stabilize food prices, which rose 11.7 per cent over the past year. The monthly producer price index, which tracks inflation in wholesale prices, also jumped by 6.8 per cent year-on-year in May, the National Bureau of Statistics said. New bank lending fell to 551.6 billion yuan (84.9 billion dollars) in May from 739.6 billion yuan in April, the central bank said on Monday.
