China's central bank has raised reserve requirements for commercial lenders for the eighth time this year in a continuing effort to mop up liquidity and curb loan growth.

The reserve ratio - the amount of money a commercial bank must park at the central bank - will increase 0.5 percentage point on yuan deposits to 13 percent starting October 25, the People's Bank of China said on its Website on Saturday.

The new requirement will equal the rate's record high set in 1988.

"The move is aimed at managing liquidity in the banking system and curbing excess credit growth," the central bank said.

The increase in the reserve requirement was the eleventh since June 2006. Those measures were accompanied by five interest rate increases this year - the latest on September 15 - and other austerity measures designed to rein in inflation and moderate the booming economy.

Analysts estimate that the Chinese economy increased more than 11 percent in the third quarter. Surging exports have pumped money into the world's fastest-growing major economy, igniting inflation and a boom in stocks and real estate.

The benchmark Shanghai Composite Index has soared 116 percent this year after skyrocketing 130 percent last year.

"The higher reserve requirement will be a hit to listed banks," said Qiu Zhicheng, a Haitong Securities Co analyst. "However, as the market had been expecting an interest rate hike on Friday, stocks may rebound on Monday as a result of the milder reserve move."

China's M2, the broad measure of money supply including cash and deposits, grew 18.45 percent in September from a year earlier to 39.31 trillion yuan (US$5.23 trillion). The growth, 0.36 percentage points above the August figure, was higher than Citigroup's 17.8 percent forecast.

Economists said the reserve increase is within expectations against the backdrop of the faster-than-expected growth in the money supply.

China's new yuan-denominated loans reached 3.36 trillion yuan in the first three quarters, up 607.3 billion yuan from a year earlier. In September, new yuan loans added 283.5 billion yuan, up 63.5 billion yuan from a year ago.

The Consumer Price Index, the main gauge of inflation, soared 6.5 percent in August from a year ago - the fastest growth since the seven percent recorded in December 1996.