CHINA yesterday announced an across-the-board increase in interest rates in a bid to cool its overheated economy. It is the second rise in recent weeks.
The mainland's central bank, the People's Bank of China, raised the rate for private and institutional fixed-term bank savings by an average of 1.72 per cent. It will bring the average interest for fixed deposits to 10.42 per cent.
The average rise of the demand deposits will be 0.99 per cent. It will bring the demand deposits rate to 3.15 per cent. The overall rate on bank deposits will increase by an average of 1.35 per cent.
The cost of bank loans will climb 1.38 per cent to around 10.74 per cent.
''The central bank's decision is designed to protect the interests of depositors and ensure a healthy development of the national economy,'' the New China News Agency quoted a senior central banker as saying.
Economists and analysts said the rise had been expected, but the new interest rate was still far below the inflation rate. They felt other supplementary actions were needed in order to douse the flames of inflation.