China raised interest rates today in the latest of a series of steps aimed at keeping inflation in check and preventing the world's fourth-largest economy from overheating.
The People's Bank of China ordered an increase of 0.27 percentage points in commercial banks' benchmark one-year deposit and lending rates. The increases take effect July 21st.
That will take the one-year benchmark deposit rate to 3.33 per cent from 3.06 per cent. The one-year lending rate will rise to 6.84 per cent from 6.57 per cent. The interest rate on sight deposits goes up to 0.81 per cent from 0.72 per cent.
The central bank has now raised interest rates five times since April 27th, 2006. It has raised banks' reserve requirements eight times since June 2006.
The central bank said that the move was aimed at keeping money supply and credit expansion, as well as investment, in check. It also said it aimed to stabilise expectations towards inflation.
The increase comes a day after the government reported a spurt in annual economic growth in the second quarter to 11.9 per cent, the fastest rate in more than a decade.