It has been expected that China will put control on tightening its monetary policy after Japan’s devastating earthquake but that does not happened, it continues to tighten its monetary cycle by raising its reserve rates on Friday.

Soon after the Group of Seven rich nations jointly interfere to compose the panic stricken markets due to Japan's nuclear crisis and to restrict the rise in Yen China made his announcement of further tightening its monetary policy.

This is the third time this year when China has raised its required reserve ratio by 50 basis points and boosts the mandatory ratio for the country's biggest banks to a record 20.0%.

Banks were about to lend to the world’s second largest economy after last week disaster but  now due to China’s decision of raising reserves rate will lock up about 350 billion yuan (USD 53 billion) of cash with banks. This would help for slowing money growth and dampening inflation.