(Adds details) SHANGHAI, May 31 (Reuters) - China’s central bank said on Monday that it will raise the FX reserve requirement ratio for financial institutions to 7% from 5%, effective on June 15. The People’s Bank of China (PBOC) said the move was meant to “strengthen FX liquidity management at financial institutions”, according to a statement published on its website. That rise in reserve requirements would make it more expensive for banks to hold dollars and other foreign currencies. Dollar/yuan swap points fell to price indicating a firmer yuan in the near term as market participants braced for companies and banks to reduce dollar holdings. As per latest data, banks in China hold about $1 trillion in foreign currency deposits. The last time the PBOC raised the reserve requirement was in 2007, from 3%. (Reporting by Winni Zhou, Vidya Ranganathan and Bejing Monitoring Desk; Editing by Toby Chopra) Our Standards: The Thomson Reuters Trust Principles.