Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

China again hikes interest rate in inflation fight

Staff


NEW YORK (CNNMoney.com) -- China's central bank has raised its interest rate for the second time in just over two months as the nation fights to keep inflation in check.

The People's Bank of China said on its website that it is raising the benchmark interest rate by a quarter of a percentage point beginning Sunday. The move increased the one-year lending rate to 5.81% and one-year deposit rate to 2.75%.

China last raised interest rates on Oct. 20 -- the first increase in nearly three years, according to state run media.

Higher food prices continue to be the main driver of inflation in China, and rate hikes were expected as the country tries to reel in its red-hot economy.

Chinese consumer prices rose 5.1%, according government data released earlier this month. That increase came on the heels of a 4.4% jump in October. And once again, a surge in food prices is the culprit. Food prices rose 11.7% for the 12 months ended Nov. 30. Excluding food prices, China's CPI edged up only 1.9%.

The central bank's vice governor, Hu Xiaolian, said on Friday that China would bring its overall money supply to a normal level using various policy tools, as the government shifts monetary policy from "moderately loose" to "prudent," Xinhua reported.

In November, the government announced price control guidelines and said that it would put state reserves of grains, edible oils and sugar on the market when necessary in order to guarantee supplies. The government also said it would strengthen market supervision and crack down on hoarding or speculation in major agricultural products. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.98%4.07%
15 yr fixed3.16%3.24%
5/1 ARM3.16%3.28%
30 yr refi3.99%4.08%
15 yr refi3.18%3.24%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 20,715.15 164.17 0.80%
Nasdaq 5,884.52 44.15 0.76%
S&P 500 2,361.03 19.44 0.83%
Treasuries 2.42 0.04 1.90%
Data as of 2:37pm ET
Company Price Change % Change
Bank of America Corp... 23.64 0.61 2.65%
Ford Motor Co 11.76 0.30 2.66%
Chesapeake Energy Co... 5.38 0.22 4.26%
Advanced Micro Devic... 13.74 0.04 0.26%
Apple Inc 143.95 3.07 2.18%
Data as of 2:22pm ET
Sponsors

Sections

USA Hockey proposed a deal to the national women's team three days before the start of the International Ice Hockey Federation World Championship games. More

Some Millennials are looking to invest in rental property as a way to create their own pension in retirement. It could be a good approach for those who have already invested in the stock market. More