China raises interest rate by 0.25 percent

The benchmark interest rate in China was last reported at 5.81 percent. In China, interest rates decisions are taken by The Peoples’ Bank of China Monetary Policy Committee. The PBC administers two different benchmark interest rates the benchmark lending rate, which is the one year PBC lending rate and the benchmark rate of central bank lending that is the rediscount rate.

This increase in interest is a good sign that China’s economy is poised for more growth and they want to control inflation that will accompany that growth. This interest rate should be seen positively for all global commodities even if there is a downward reaction in short term.

“These policy moves could be front-loaded in coming months, as headline inflation figures remain high and economic growth faces overheating risks early next year,” said Wang Qian, the brokerage’s Hong Kong-based chief China economist.

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