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| Version 1 | Version 2 |
|---|---|
| China rates rise to cool economy | China rates rise to cool economy |
| (20 minutes later) | |
| China has raised interest rates to keep inflation in check and stop the globe's fourth-largest economy overheating. | China has raised interest rates to keep inflation in check and stop the globe's fourth-largest economy overheating. |
| The People's Bank of China (PBC) ordered an increase of 0.27% of a point in commercial banks' benchmark one-year deposit and lending rates. | |
| The increases will take effect on 21 July, the bank said. | The increases will take effect on 21 July, the bank said. |
| The one-year benchmark deposit rate will move to 3.33% from 3.06%, while the one-year lending rate will rise to 6.84% from 6.57%. | The one-year benchmark deposit rate will move to 3.33% from 3.06%, while the one-year lending rate will rise to 6.84% from 6.57%. |
| The move comes a day after data showing that China's economy outstripped analysts expectations during the second quarter, growing by 11.9% from a year before. | The move comes a day after data showing that China's economy outstripped analysts expectations during the second quarter, growing by 11.9% from a year before. |
| On Thursday, the government said it would "improve macro controls" to rein in the economy. | On Thursday, the government said it would "improve macro controls" to rein in the economy. |
| The rapid growth has pushed inflation to a 33-month high. | The rapid growth has pushed inflation to a 33-month high. |
| A boom in production, fuelled by strong exports and investment, is contributing to the inflationary risks the country now faces. | A boom in production, fuelled by strong exports and investment, is contributing to the inflationary risks the country now faces. |
| 'Far from enough' | |
| The central bank has now raised interest rates five times since April 2006. | |
| Zhang Yongjun, economist at the state information centre in Beijing said: "I think the rate rises could curb the rapid investment growth and credit expansion to a certain degree. | |
| "But it's far from enough. The current interest rates are still low and real deposit rates are in negative territory." | |
| Others said the move was widely expected, but would not be enough to curb inflation. | |
| Lin Songli, an analyst at Guosen Securities in Beijing added: "It will not completely ease inflationary pressure in the second half, because current fast CPI growth is mainly due to the short supply of pork and other foodstuffs." | |
| The PBC said the rate adjustment would help to "guide reasonable growth of credit and investment, adjust and stabilise expectations about inflation and maintain basic stability of general price levels". |