China tightens monetary policy

China’s central bank increased interest rates for the third time this year yesterday, making clear that taming inflation is a top priority even as the economy slows gently. Benchmark one-year lending rates will be raised 0.25 per cent to 6.56 per cent, and benchmark one-year deposit rates will be raised 0.25 per cent to 3.5 per cent. “The interest rate rise is within our expectation, which shows the CPI in June could be really high,” said Duan Jihua of Sealand Securities in Shanghai.