China to raise interest rates as prices rise
July 6th, 2011 - 10:57 pm ICT by IANSBeijing, July 6 (IANS) China’s central bank said it will raise the benchmark one-year borrowing and lending rates by 25 basis points Thursday, Xinhua reported.
This is the third time the People’s Bank of China (PBOC) is raising its interest rates this year. The previous one occurred April 5. It also hiked the reserve requirement ratio for banks six times this year.
The move raises the benchmark one-year deposit rate to 3.50 percent and one-year benchmark lending rate to 6.56 percent.
Inflation data for June will be released July 15 and many economists forecast it will hit a new high of above six percent.
Food prices have been increasing, some dramatically. Pork prices rose for the 10th consecutive week as of June 26 and the wholesale price of pork was up 68 percent from a year earlier, according to the commerce ministry.
China will continue to implement a prudent monetary policy as inflationary pressures still remained high, the central bank said on its website Monday.
The Consumer Price Index (CPI), a main gauge of inflation, rose by 5.5 percent in May from the previous year, setting a 34-month high and well above the government’s target ceiling of four percent for the year.
The interest-rate hike will help check high inflation, said Lu Zhengwei, chief economist for the Industrial Bank.
- China likely to further raise interest rates: Analysts - Aug 07, 2011
- China's inflation hits three-year high in June - Jul 09, 2011
- China's November inflation may fall below 5 percent - Dec 06, 2011
- China may raise interest rate in Q3 - Jul 03, 2011
- China inflation may touch six percent: Journal - Apr 07, 2011
- China raises interest rates again - Dec 26, 2010
- China's inflation reaches 37-month high - Aug 09, 2011
- China's GDP to grow by 8.8 percent in 2012 - Jan 03, 2012
- Price stability top priority, says China's central bank - Sep 12, 2011
- Police rates hiked to tame inflation: RBI - Aug 12, 2011
- Economists divided on impact of rate hikes on India's growth - Sep 20, 2011
- Inflation eases a tad to 9.22 percent in July - Aug 16, 2011
- Rate hikes not curbing inflation, only hampering growth: Industry - Sep 16, 2011
- Policy rates up again as Indian central bank acts on inflation (Roundup) - Mar 17, 2011
- China's GDP growth sees moderate slowdown (Lead) - Jul 13, 2011
Tags: bank of china, basis points, chief economist, commerce ministry, consumer price index, food prices, index cpi, inflation data, inflationary pressures, interest rate hike, monetary policy, pboc, pork prices, previous year, s central, six times, target, third time, wholesale price, xinhua