China still has leeway to further raise required reserves for its banks, said Wu Xiaoling, a lawmaker and former vice governor of the central bank.

Although the poor are hit by a negative interest-rate return caused by high inflation, the central bank should focus on solving macroeconomic issues as a whole while the government can provide the low-income group with fiscal assistance, she said.

There is no way around the fact that too much money is flowing into the market and excess liquidity that leads to inflation and the asset bubble should be strictly managed, Wu told the Beijing News.

The People’s Bank of China said late on Friday that it would increase required reserves by 50 basis points, another in a string of measures taken by the government to address inflationary pressure and curb loans.

China's business press carried the story above on Monday. China.org.cn has not checked the stories and does not vouch for their accuracy.