Estimated read time: Less than a minute
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
BEIJING (AP) — China's central bank responded to the U.S. Federal Reserve's interest rate increase by nudging up a key policy rate Thursday on lending to commercial banks. It left the benchmark rate for borrowing by companies and the public unchanged.
The People's Bank of China said it was responding to market forces by raising the rate charged by its one-year lending facility by 0.05 percentage points to 3.25 percent. Rates paid on bank reserves rose by a similar margin.
"The change in interest rates is a result of market supply and demand, and at the same time is a normal market response to the Federal Reserve's interest rate hike," said a central bank statement.
There was no change in the rates for borrowing by companies and the public and for deposits.
Beijing has tightened controls on the movement of money out of China to stop an outflow of capital, which could be worsened if higher U.S. rates attract investors with the possibility of higher returns.
Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
