China's central bank today announced its sixth interest rate hike this year, the government's latest move to slow rising inflation and cool an economy that is growing at double-digit pace.
The increase raises deposit rates 0.27 points and the lending rate by 0.18 points, according to a statement posted on the central bank's website. The key one-year lending rate will rise to 7.47%, while the one-year deposit rate will stand at 4.14%.
The interest rate hike was widely expected, particularly after data released last week showed the economy was roaring ahead despite a raft of measures aimed at tightening liquidity and cooling the economy.
Most significantly, the government said last week that inflation reached 6.9% in November, the highest rate since December 1996.
Premier Wen Jiabao had previously forecast the economy would grow by 11.5% this year, which will be the fifth year in a row of double-digit economic growth.
China has already hiked the interest rate five times this year, with the last one in September. It has also raised the amount banks must keep in reserve 10 times, which specifically aims to mop up excess liquidity.
