Interest rates up for fifth time this year

China raised interest rates for the fifth time this year on Friday, following confirmation earlier in the week that the inflation rate had risen 6.5% year-on-year in August, its highest level in a decade. From Saturday, the central bank moved the one-year renminbi lending rate to 7.29% from 7.02% and the one-year renminbi deposite rate from 3.6% to 3.87%, the Wall Street Journal reported. There will also be an increase in lending rates at the public housing fund, which helps individuals buy property. These measures are intended to drain liquidity from China's economy, which is booming while other countries still suffer from the subprime-induced credit crunch. Domestic banks made US$410 billion in loans in the first eight months of the year, or 97% of the total loans made in 2006. Further hikes in the interest rate and banks' reserve ratio requirement are expected before the year is out.