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China again raises its interest rates

August 22, 2007|From Bloomberg News

China raised interest rates Tuesday for the fourth time since March to cool the fastest-growing major economy after inflation surged to a 10-year high and stocks continued to soar.

Some economists said another increase was likely before the end of the year.

The benchmark one-year lending rate will rise 0.18 of a percentage point today to 7.02%, the People's Bank of China said. The one-year deposit rate will rise 0.27 of a point to 3.6%.

China's consumer price index jumped 5.6% in July, fanning concern that cash from record trade surpluses might cause the economy to overheat.

China's CSI 300 stock index rose 25% in the last month as stock markets elsewhere in the world were tumbling. The index has climbed 144% this year after more than doubling in 2006.

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