China’s central bank raised the one-year lending rate by a quarter point to 6.06% and the one-year deposit rate to 3% on Tuesday, Bloomberg reported. The deposit rate remains nearly two percentage points below the rate of increase in the consumer price index, maintaining an incentive for consumption, but the news had a negative effect on copper futures and on shares in mining companies, both of which are heavily influenced by growth in the construction industries. While rates have yet to return to pre-crisis levels, Wang Qing, an analyst with Morgan Stanley in Hong Kong, predicted in a note that policy makers are likely to raise rates again later in the year, as well as increase bank reserve requirements and allow the renminbi to continue to appreciate. The renminbi climbed 0.1% in offshore trading Tuesday to RMB6.5555 to the dollar.
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