China raised interest rates today by 0.27 percentage points in an effort to rein-in the overheated economy by curbing excessive credit and redundant investments that could bust the world's fourth-largest economy.
The People's Bank of China (PBOC), the apex bank announced that it will raise the one-year benchmark interest rate by 0.27 percentage points as of August 19.
The one-year deposit rate is now hiked to 2.52 per cent and the one-year loan rate goes up to 6.12 per cent, it said.
The PBOC raised the loan rates by the same margin in late April but did not change the deposit rates.
China's economy surged by 10.9 per cent in the first half of 2006, fastest in a decade, driven by fast credit loans growth and excessive use of land for industrial projects.
The central bank raised commercial banks' deposit reserve ratio earlier this week by 0.5 percentage points to rein in excessive bank lending.
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