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 fixed3.41%3.40%
15 yr fixed2.69%2.68%
5/1 ARM2.83%2.86%
30 yr refi3.42%3.43%
15 yr refi2.70%2.71%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 18,395.40 -53.01 -0.29%
Nasdaq 5,218.92 6.71 0.13%
S&P 500 2,169.04 -3.43 -0.16%
Treasuries 1.64 0.06 3.68%
Data as of 12:19am ET
Company Price Change % Change
Bank of America Corp... 15.79 0.26 1.67%
Chesapeake Energy Co... 6.40 0.07 1.11%
Freeport-McMoRan Inc... 10.89 -0.20 -1.80%
Apple Inc 106.94 -0.63 -0.59%
Micron Technology In... 16.51 0.31 1.91%
Data as of Aug 26
Sponsors

Sections

On Friday Janet Yellen reiterated again that the government has to spend more during crises. Both Hillary Clinton and Donald Trump want to boost spending. More

Tesla started building its massive Gigafactory in June 2014. Since then, home prices in the nearby market have risen faster than the national average. More