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China raises one-year deposit and loan interest rates by 27 basis points to 3.6 percent and 7.02percent respectively as of Aug. 22. This is the fourth time that China raised the one-year benchmark interest rates this year and only one month after the last rise on July 21. he move is not unexpected as China's consumer price index (CPI) in July rose by a record high in the past ten years


China raised the one-year benchmark interest rates by 0.27 percentage points as of March 18.
Related Events
The stock market in China's mainland has been hitting record highs since late last year.
China raised the one-year benchmark interest rate by 0.27% on August 19,2006.
A Chinese national research center said on Wednesday that the consumer price index is still within government control although it will "keep rising at a moderate rate for a relatively long time".
China Raises Benchmark Interest Rates
China will raise the benchmark one-year deposit and loan interest rates by 0.27 and 0.18 percentage points respectively to 3.60 percent and and 7.02 percent as of Aug. 22, the People's Bank of China announced on Tuesday.
Interest Rate Hike Likely in China
An interest rate hike is on the cards in China to curb excessive liquidity as bank lending rebounded in February, according to an analytical report in the China Securities News.
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Recent Monetary Policy
August 19, 2006: one-year benchmark interest rate rose by 0.27 percent.
August 15, 2006: banks' deposit reserve ratio rose by 0.5 percentage points.
July 5th, 2006: 0.5 percentage points rise in the reserve requirement ratio for deposit-taking financial institutions.
April 27, 2006: a 0.27 percentage points hike in the benchmark one-year loan interest rate.
Voices
"By raising the interest rates, the central bank signaled its concern over the trend towards a higher inflation rate and an overheated economy."
--Tang Min, chief economist with the Asia Development Bank Mission in China

"The reserve ratio adjustments in January and February were effective in absorbing excess liquidity in banks but failed to curb commercial bank's excessive lending."
--Yin Jianfeng, an expert with the China Academy of Social Sciences

"The rapid growth in bank loans and M1 supply raise the possibility of raising interest rates by the People's Bank of China (PBOC) around April."
--China Securities News
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