The benchmark one-year lending rate will increase to a nine-year high of 7.29 percent from 7.02 percent, starting tomorrow, the central bank said today on its Web site. The rate has risen from 6.12 percent on March. here is the rather terse text of the communique:
In order to strengthen liquidity management in the banking system and check the excessive growth of monetary credit, the People’s Bank of China has decided to raise the RMB reserve requirement ratio for depository financial institutions by 0.5 percentage points as of September 25, 2007."
Money supply grew 18.1 percent in August, exceeding the central bank's annual target of 16 percent for the seventh straight month. Urban fixed-asset investment climbed 26.7 percent in the first eight months of this year.