China's economy 'is just too hot', says Peter Hoflich

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Amid further evidence of rising prices in China, the authorities have tried to cool the markets. China's central bank has increased the money Lenders must hold in reserve, for the fourth time this year.

This comes after inflation hit a nearly three-year high, AND many now fear the world's second biggest economy is over-heating.

By raising the required reserve ratio to 20.5%, the Chinese central bank hopes to lock up about $54bn (£33bn) of loanable cash, restricting the amount of money that can be borrowed.

Peter Hoflich, managing editor at the Asian Banker, says that keeping inflation in check will be an ongoing battle.

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