Interest rates up for sixth time this year
21 December 2007
Interest rates were increased for the sixth time this year on Thursday, the Financial Times reported. The one-year benchmark deposit rate has gone up by 27 basis points to 4.14% and the one-year lending rate is now 7.47%, an increase of 27 basis points. The move was in part seen as a response to growing public concern about rising inflation. The consumer price index hit an 11-year high of 6.9% in November, driven upwards by rising fuel and food prices. The announcement of the rate hike came shortly after the People's Bank of China (PBOC) published the results of a survey of 20,000 depositors, 48% of whom said current prices were "overly high and hard to accept." In addition, 64% of respondents said they expected prices to continue to rise next year. A separate PBOC survey of 5,497 companies found they were under growing pressure from rising prices and were concerned about economic overheating.
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