The latest rise in reserve requirements will have little effect on the Bank of China because of ample market liquidity, a vice president said.

"China's banking industry is still full of liquidity, and the impact of reserve requirement increase will be limited on the bank," BOC official Zhu Min said on the sidelines of a financial conference in Shanghai on Saturday.

The central bank on Thursday ordered commercial banks to set aside more money as reserves to curb excessive lending and rein in inflation.

The reserve ratio - the amount of money a bank must set aside at the central bank - will increase 0.5 percentage point to 10.5 percent on yuan deposits starting on April 16.

It is the third such hike this year and the sixth in 10 months.

Zhu estimated the move will freeze about 180 billion yuan (US$23.3 billion) worth of funds held by China's banking sector.

Zhu said the reserve hike is a good move as China strives to cool its rapid lending growth and guard against overinvestment.

"Too much liquidity is a worldwide concern," Zhu said.

Low long-term real interest rates around the world and the development of the derivatives market have contributed to the problem on the global scale.

China's excess liquidity is mainly the result of its swelling trade surplus, Zhu noted.

Economists expect more austerity measures, including additional reserve increases, to follow this year.

Zhu holds a doctorate in economics from Johns Hopkins University in the United States. He joined the bank in 1996 as head of international financial research and was promoted to his current position last year.