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China Orders Increase in Bank Reserves

China's central bank has ordered the country's biggest lenders to increase their cash reserves in another bid to combat rising inflation.

The directive issued Wednesday by the People's Bank of China says the banks must increase their reserves by 0.5 percent. The order means some banks will be setting aside at least 18 percent of their capital.

The central bank increased interest rates last month for the first time in three years, as part of an effort to curb lending and tighten controls on credit, which can lead to inflation.

Wednesday's order comes a day before the government releases data on October's inflation rate, which is expected to increase to 4 percent, a point higher than the official target.

September's inflation rate was 3.6 percent.

Beijing took a number of aggressive moves to boost the country's economy as the global recession took hold in 2009, including a $586-billion economic stimulus package and a record surge in lending.

Some information for this report was provided by AP, AFP and Reuters.