The Peoples Bank of China will raise its interest rates by 25 basis points. The lending rate will be 6.56%, and the deposit rate will be 3.5%, effective tomorrow. This is the third time this year that the PBOC has raised interest rates in efforts to meet its 4% target inflation rate. However, China may fail to do so as inflation for the first five months of the year was 5.2%.
The Peoples Bank of China will raise the reserve requirement for commercial banks by 50 basis points to 21.5% starting on June 20th. The 21.5% reserve requirement will be a record high. Approximately 380 billion yuan will be taken off the market and become required reserves in order to combat China’s high inflation.
The Peoples Bank of China will lift its interest rates by 25 basis points. Starting April 6th, the deposit rate will be 3.25% and the lending rate will be 6.31%. This is the fourth time in sixth months that the PBOC has raised its rates in order to combat inflationary pressures.
