Observers say the move is aimed at deterring further yuan speculation
The People's Bank of China announced yesterday that it was lifting domestic US and Hong Kong dollar deposit rates by 0.375 percentage point, the second increase since the revaluation of the yuan on July 21.
Market observers said the move was part of the ongoing exchange regime reforms and aimed to deter further speculation on the yuan.
The benchmark one-year deposit rate for US dollars goes up to 2 per cent, while the rate for Hong Kong dollars rises to 1.875 per cent from today, the central bank said in a statement posted on its website.
The one-month US and Hong Kong dollar deposit rates will go up 0.25 percentage point to 1.25 and 1.125 per cent respectively, while the three-month deposit rates rise by 0.375 percentage point to 1.75 and 1.625 per cent, respectively.
This is the third round of interest rate increases this year and the second since the central bank raised the one-year US and Hong Kong dollar deposit rates by 0.5 percentage point to 1.625 and 1.5 per cent respectively last month.
Wilson Chan Fung-cheung, the head of treasury and markets at ICBC (Asia), said: 'Given that the US and Hong Kong dollar deposits offer high returns, it might reduce some of the attractiveness of the yuan.'