Corrected: China raises bank rates 25 basis points as New Year holiday ends

08 February 2011 12:57  [Source: ICIS news]

Correction: In the ICIS news story headlined "China raises bank rates 0.25 basis points as New Year holiday ends" dated 8 February 2011, please read the headline as …"China raises bank rates 25 basis points…" instead of …"0.25 basis points…"

LONDON (ICIS)--China raised bank lending rates by 0.25 percentage points on Tuesday in an attempt to slow down the economy ahead of the return to work at the end of the Lunar New Year holiday.

The week long holiday ends on Tuesday with financial markets opening on Wednesday.

The People's Bank of China said it would raise one-year lending rates to 6.06% and one-year deposit rates to 3.0%.

A rates hike at the end of the holiday period was widely expected, as are further hikes this year, as attempts are made to curb inflation.

Oil prices have fallen on the news, however, and the rates increase is expected to cause some nervousness on global financial markets.

China raised interest rates most recently in December and October last year.

($1 = €0.74)

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By: Nigel Davis
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