China central bank raises interest rates

Updated: 2007-05-18 19:46

China's central bank said on Friday that it would raise both interest rates and banks' required reserves.

The one-year lending rate will increase by 0.18 percentage point and the one-year deposit rate by 0.27 percentage point, effective May 19.

That will take the one-year benchmark deposit rate to 3.06 per cent from 2.79 per cent. The one-year benchmark lending rate will rise to 6.57 per cent from 6.39 per cent.

Banks' reserve requirement ratio would be increased by 0.5 percentage point, effective June 5, the central bank said on its website. That takes the ratio for big banks to 11.5 per cent.

The People's Bank of China has now raised interest rates four times since April 27, 2006, and reserve requirements eight times since June 2006.

The central bank had announced an increase in the yuan's daily trading band against the dollar just prior to the annRouncement.

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