China’s central bank raised interest rates for the fourth time in five months as the government struggles to reduce bank lending, rein in inflation and slow economic growth.
The People’s Bank of China announced it would increase one-year rates by 25 basis points from today, raising the deposit rate to 3.25 per cent and the lending rate to 6.31 per cent.
The increase came earlier than many analysts anticipated and suggested that price rises for March, to be published next week, were probably higher than expected. Consumer price inflation in China rose 4.9 per cent in February from a year earlier, the same reading as in January. But politically sensitive food prices accelerated and producer prices increased 7.2 per cent, their biggest rise since October 2008.