26 Dec 2010

Interest rates to rise in China

2:00 pm on 26 December 2010

China is to raise interest rates for the second time in just over two months as the government steps up its fight against inflation.

The People's Bank of China said it will raise the lending rate by 25 basis points to 5.81% and lift the benchmark deposit rate by 25 basis points to 2.75% .

In a statement on its website, the bank said that the latest rate rise would take effect on Sunday.

The bank said on Friday it will deploy a range of policy tools to head off inflationary pressures and asset bubbles.

Beijing said earlier in December it was switching to a prudent monetary policy, from its earlier moderately loose stance.

China raised interest rates on 19 October for the first time in almost three years.