The central bank said the requirements on banks' liabilities in foreign currency would rise to 7.0 percent from 5.5 percent, requirements on retail deposits to 5.0 percent from 4.5 percent and on other liabilities to 5.5 percent from 5.0 percent.
It will also set an averaging ratio, which allows banks to spread their reserves over time and even out periods of excess and scarce liquidity, at 0.5 percent compared with 0.4 percent before.
"It was a timely decision. The rise is significant, I think there will be an impact," said Natalya Orlova from Alfa Bank. The central bank said the rise of the averaging ratio will smooth the impact of the measure.
Annualised inflation is threatening to exceed 15 percent in May, well above the government's target of 10 percent. Mandatory reserve requirements are the money the banks should set aside and a rise in requirements slows lending growth.
Orlova expects the measure to bring down the annual inflation rate by 0.3 percentage points and said it was equivalent to slowing expected 48 percent corporate lending growth in 2008 by about 2 percentage points.
Corporate lending grew by 70 percent in the first quarter and the central bank's deputy chairman Gennady Melikyan said last week he was worried about Russian banks growing too fast and lending too much despite the global economic slowdown.
Russia's top banks Sberbank and VTB reported healthy results for 2007 but warned of an imminent slowdown later this year. Both banks lobby for access to cheap government cash.
The rise in reserve requirements came as the largest Russian banks and corporations have returned to capital markets after a pause caused by the global credit crunch with banks like VTB issuing a $2 billion Eurobond last week.
The Russian banks have made a lucrative business of borrowing cash at low interest rates abroad and lending it at home at effective interest rates which have in the past reached as much as 50-70 percent per year.
The requirements are the central bank's second most powerful anti-inflation monetary policy tool after the rouble exchange rate but the central bank has so far been reluctant to revalue the rouble due to speculative capital inflow fears.
A number of large Western investment banks advised their clients to go long on the rouble in anticipation of a revaluation after the inauguration of President Dmitry Medvedev to bring inflation in line with the governments' forecasts.
The central bank, which runs a managed float of the rouble against the dollar/euro basket, dismissed the recommendations as talk of irrational investors and moved to introduce greater volatility in the forex market to confuse speculators.
Medvedev's new Prime Minister and former President Vladimir Putin this month said his government was prepared to tolerate double-digit inflation for some years, squashing revaluation rumours.
Russia lifted capital controls in 2006 exposing its economy to volatile capital flows but left the fixed exchange rate regime in place, which made guessing about the timing of the revaluation a favourite game among investors.
"This move, unlike the interest rates rise or the revaluation of the rouble, will not bring speculative capital and may tie up excess liquidity," said Yaroslav Lissovolik from Deutsche Bank.
The move, although viewed as significant, still leaves the Russian reserve requirements well below China's level of 16.5 percent for big banks and analysts say there is room for more hikes in the future.
"If banks will start borrowing on international capital markets, we are likely to see more rises of mandatory reserve requirements," said Orlova.