Interest rates up to combat inflation

Interest rates were raised for a fourth time this year on Tuesday as the government moved to bring inflation under control, AFP reported. From Wednesday, the benchmark lending and deposit rates will rise 0.18 and 0.27 percentage points, respectively. This brings the main lending rate to 7.02%, while the deposit rate rises to 3.6%. Announcing the rate hike, the People's Bank of China said it wanted to "reasonably adjust money and loan supply as well as stabilize inflation expectations." Inflation hit 5.6% in July from a year earlier, its highest level in more than a decade. The principal cause was a 15.4% rise in food prices, with meat soaring 45.2% due to a pork shortage.