Like the Turkish central bank, the Chinese
central bank is continuing to raise the reserve capital
requirements for banks.

The Chinese central bank has raised the
reserve capital ratios for the fourth time in 2011.

The rise in reserve capital ratios means that
Chinese banks will have less money to lend to consumers.

The Chinese central bank has raised the
reserve capital ratios by 50 basis points to 20.5%, resulting in
about CYN350bn ($53.6bn) that banks will have to put aside instead
of making available for lending.

The rise in reserve capital requirements
serves as indemnity against high inflation and excessive liquidity,
or hot money from foreign investment capital.

The chief executive of the Chinese central
bank, Zhou Xiaochuan, said that the bank would continue to bear
down on inflation.

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The Turkish bank has continued to raise
reserve capital ratios, but its requirements are below that of
China with 15% as of 23 March 2011.

RBI is running a series on Turkish banks
with several of the country’s senior banking executives
including Akbank’s deputy CEO and chief retail banking officer
Hakan Binbasgil, as well as Akbank’s executive vice president for
strategy, Tunc Akyurt.

RBI has also spoken to Soner Canko, assistant general
manager at Turkish state-owned Ziraat Bank.