Reply #15: China raises interest rates

[Demeter]

China’s central bank raised benchmark interest rates on Saturday, the second increase in just over two months, as the government stepped up its battle against persistent inflation.

The People’s Bank of China announced a 25 basis point rise in the one-year base lending and deposit rates, taking the lending rate to 5.81 per cent and the deposit rate to 2.75 per cent.

The Christmas Day rate hike came after the central bank raised rates on October 19 for the first time in nearly three years. Although Christmas is not a public holiday in China, the timing of the rate hike announcement
– late on Christmas Day and on a Saturday – was an apparent attempt not to unsettle global and domestic markets.

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http://link.ft.com/r/J0VG55/V1YWJJ/B49CK/72UXFV/A737GV/HK/t?a1=2010&a2=12&a3=25