With inflation pegged at 3.6 percent, the People’s Bank of China announced on its website that it will increase the one-year benchmark lending rate from 5.31 percent to 5.56 percent. The rate for interest paid on deposits will also increase rising to 2.5 percent from 2.25 percent.
The central bank Ã¢â‚¬Å“wants to stay ahead of the inflation curve,Ã¢â‚¬Â said David Cohen, a Singapore-based economist at Action Economics. Ã¢â‚¬Å“ChinaÃ¢â‚¬â„¢s economy seems to be getting back on track and the inflation rate seems to be creeping up.Ã¢â‚¬Â He expects another rate increase before year-end.
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