China's Central Bank announced Tuesday that it would raise benchmark one-year borrowing and lending rates by 25 basis points from Wed 09 Feb.
The rate hikes come amid increasing pressure on the Chinese government to control inflation.
After the hikes, the benchmark one-year deposit interest rate will climb to 3 percent, while the one-year loan interest rate will reach 6.06 percent.
This is the first rise in China's one-year benchmark interest rates this year and signals a renewed effort to cool prices and tighten liquidity.
Analysts said the timing of the hike, immediately after the Lunar New Year holiday, would send a strong signal to the market that the PBOC was paying more attention to inflation.
China's CPI (Consumer Price Index) rose 4.6% in Dec 2010 and is expected to rise further in 2011.
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