Editor's Note: China raised the deposit and lending rates in July for a third time this year after the reserve requirement ratio was increased five times. The monetary moves reduce the amount of lending in society and experts expect these actions to also help fight inflation. |
Highlights
The central bank announced that it will increase interest rates, for the third time this year, by 25 basis points. The new rates take effect on Thursday.
China's inflation expected to stabilize in H2
Interest Rates
The central bank announced on Wednesday that it will increase interest rates, for the third time this year, by 25 basis points. Stabilizing prices a top priority: Wen
June CPI may hit three-year high
Monetary Policies
The People's Bank of China (PBOC), the central bank, on Thursday suspended its regular issue of bills to inject liquidity into banks to ease tight money supply in the market.
Reserve Requirement Ratios
China's central bank Tuesday lifted the ratio of funds that banks must set aside as reserves by a half point as it attempts to contain rising inflation.
Experts Say
China should rely more on adjusting the interest rate to fight inflation, because reserve requirement ratios rises hurt private-sector businesses.
Timeline
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2011 July 7 One-year deposit and lending rates were raised by 0.25 of a percentage point. June 20 The reserve requirement ratio was increased by half of a percentage point. May 18 The reserve requirement ratio was increased by half of a percentage point. April 6 One-year deposit and lending rates were raised by 0.25 of a percentage point. March 25 The reserve requirement ratio was increased by half of a percentage point. February 24 The reserve requirement ratio was increased by half of a percentage point. February 9 One-year deposit and lending rates were raised by 0.25 of a percentage point. January 20 The reserve requirement ratio was increased by half of a percentage point. |
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| Changes in Interest Rates Since 2009 |
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| Changes in Reserve Requirement Ratios Since 2009 |
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