China raises medium-term lending rates in tightening signal

Beijing

CHINA'S central bank increased the interest rates on medium-term loans that it uses to manage liquidity, a move analysts say signals its intent to keep a tight rein on leverage in the financial system.

The one year Medium-term Lending Facility rate was raised to 3.1 per cent from 3 per cent and the six-month rate to 2.95 per cent from 2.85 per cent, the People's Bank of China said in a statement on Tuesday. The monetary authority said that the operations injected 245.5 billion yuan (S$50.7 billion) into the financial system.