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.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.83%||3.84%|
|15 yr fixed||3.02%||3.05%|
|30 yr refi||3.81%||3.82%|
|15 yr refi||3.01%||3.04%|
Today's featured rates:
Nike is opening up shop on Amazon.com and the company plans "big shifts" over the coming year. More
The Congressional Budget Office narrows its projection for when Treasury will run short on money if Congress doesn't raise or suspend the country's debt ceiling. More
Apple is teaming up with medical device maker Cochlear Limited to allow cochlear implant users to stream sound right from their iOS devices. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
It's never too late to improve your chance of having a more secure retirement, but you'll need to put retirement planning at the very top of your list of financial priorities. More