The photo shows headquarter of the People's Bank of China, the central bank. China is to raise one-year deposit and loan interest rates by 27 basis points to 4.14 percent and by 18 basis points to 7.47 percent respectively from Dec. 21, the central bank said Thursday. (Xinhua Photo)
Photo Gallery>>>

    BEIJING, Dec. 20 (Xinhua) -- China is raising interest rates for the sixth time this year in a fresh move to cool a red-hot economy expected to expand 11.5 percent for the full year and to battle inflation that has climbed to an 11-year high.

    China would raise the one-year deposit interest rate by 27 basis points to 4.14 percent and the lending rate by 18 basis points to 7.47 percent as of Friday, the central bank said in a statement posted on its website.

    The move, which aimed to "prevent the economy from overheating and the structural price rises from evolving into evident inflation", followed the "tight" monetary policy for 2008 made by the Central Economic Work Conference held earlier this month.

    The key economic meeting decided to shift China's monetary policy from a "prudent" stance, which the country had followed for the last 10 years, to "tightening".

    With the country still facing inflationary pressure, the central bank lifted the rates to stabilize the public's expectations for inflation, a spokesman with the central bank said.

    Rising food prices, especially pork, the country's meat staple, pushed China's inflation rate to a new 11-year high of 6.9 percent in November. The inflation rate for the first 11 months was 4.6 percent, compared with the government's target of three percent.

    Analysts said people's expectations for further price rises also played a role in inflation by breaking the balance between supply and demand.

    Different from the five previous rate hikes, the central bank lowered the interest rate for sight deposits by nine basis points to encourage people to put more money in the bank for a fixed period, rather than having it readily available for stock or property investment.

    Earlier this month, China told its commercial banks to hold more money in reserve for the 10th time this year. It was also in effort to cool the booming economy and slow rising inflation.

    The reserve requirement ratio was raised by one percentage point, the largest increase this year.

Economy to grow 11.6%, CPI seen at 4.5%

    BEIJING, Dec. 04 -- China's gross domestic product (GDP) growth is expected to be close to 11 percent next year but inflation will remain a major concern, said a top Chinese think tank.

Expert: China's excess liquidity surpasses central bank's expectations

    BEIJING, Nov. 11 (Xinhua) -- A senior researcher with the Chinese Academy of Social Sciences (CASS) on Sunday said the latest reserve requirement ratio hike has revealed that China's excess liquidity has risen beyond the expectations of the central bank. 

China to raise benchmark interest rate by 27 basis points

    BEIJING, Aug. 21 (Xinhua) -- China will raise one-year deposit and loan interest rates by 27 basis points to 3.6 percent and 7.02percent respectively as of Aug. 22, the central bank announced on Tuesday.

Investment bank forecasts China's economy to grow 11% in 2008

    Beijing, Dec. 4 (Xinhua) -- China's economy is forecast to grow11 percent in 2008 while the RMB will continue to appreciate, an investment bank said in its latest analysis. 

UBS: China's economy is not overheated

    BEIJING, Dec. 1 -- Investors' concerns over a growth "hangover" from domestic over-investment are unwarranted, said a UBS report released earlier this week about China's macroeconomic trends in 2008. 

Top statistician forecasts China's CPI at 4.5-4.6% for whole year

    BEIJING, Nov. 23 (Xinhua) -- China's consumer price index (CPI) will rise 4.5 percent to 4.6 percent for the whole of the current year, which will indicate a moderate and tolerable inflation, the country's top statistician Xie Fuzhan said Thursday at Tsinghua University.