China on Friday announced the seventh increase of the bank reserve requirement ratio in the past year amid heightened concerns about inflation.

The People's Bank of China (PBOC), or the central bank, said on its website that it would lift the bank reserve requirement ratio by 50 basis points as of Jan. 20.

After the hike, China' s major banks will have to set aside 19 percent of their reserves, and small and medium banks will have to maintain 15.5 percent of their deposits as reserve, a record high for the country's financial institutions.

According to the PBOC's latest figures, the reserve ratio hike will tighten another 350 billion yuan (US$53.1 billion) of bank liquidity as the outstanding yuan-denominated deposits in China stood at 71.82 trillion yuan (US$10.9 trillion) as of the end of 2010.

It was the PBOC's first move in 2011 to tighten excessive liquidity in the market amid mounting inflationary pressure.

The PBOC had raised the banks'reserve ratio six times last year to rein in accelerating inflation as China's consumer price index (CPI), a main gauge of inflation, reached 5.1 percent in November 2010, the highest in 28 months.

This latest hike is in line with the central bank's policy of checking market liquidity in recent months while showing its determination to fight inflation, said Jia Kang, director of the Financial Science Institution under the Ministry of Finance.

Analysts expected consumer inflation would remain above 5 percent in December, and remain at a high level in the coming months as prices stay high amid the shopping spree during China's traditional Spring Festival, which falls on Feb. 3 this year.

According to Xinhua's price monitoring database, prices of vegetables, edible oil and sea products rose steadily in January, while prices for milk and eggs remained stable.