Wednesday, July 6, 2011

China's Central Bank Hikes Rates, Again

The People's Bank of China has hiked its interest rates by 25 basis points. This is the fifth hike in nine months as the bank attempts to slow accelerating price inflation.

Indications are that China's economy was already slowing before this hike. The hike will, thus, put only greater pressure on the Chinese economy and stock markets. A crash of the Chinese stock market is very likely in the not to distant future.

The latest move increases China's benchmark one-year lending rate to 6.56 percent, and lifts its benchmark one-year deposit rate to 3.5 percent, the central bank said.

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