Go Finance Reporting BEIJING - China raised its benchmark interest rate for the second time in just six weeks. This proves the intensification of the fast growing economic battle against the threat of global inflation.
It was very surprising. But it seems investors are already expecting the Chinese government's measures to tighten monetary in order to combat rising prices and to ward off the bubble.
China raised the benchmark one-year deposit rate by 25 basis points would be three percent, while one-year lending rate will also be raised by 25 basis points to 6.06 percent.
China's central bank (the People Bank of China / PBOC) said that interest rate changes take effect on Wednesday.
Although annual inflation slowed in December, a number of analysts surveyed by Reuters said inflation would reach 5.3 percent last month, and that number was the highest in more than two years, due to soaring food prices.
"This is the first interest rate hike in the Year of Rabbit ,but it will not be the last ,"said economist with the China Merchants Bank Xu Biao ,in Shenzhen .
"If inflation remains high in February, the central bank will be forced to raise interest rates in a sustainable way. trust investors will be very hurt by expectations of an aggressive policy tightening," he said. (GoFinance)
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