China’s Central Bank brought its refinancing rate up again. It is the third time it made such a decision for the last four months, AFP informs. Thus, the key rate increased by 0.25 % up to 6.06%.
This step was taken by the Central Bank of China with an aim to curb inflation. Its rate was reported to be 4.6% in December. As compared to November, the price growth slowed (5.1%), though it is expected to accelerate in January.
The consumer prices gained 3.3% for the whole year, running over an upper limit of 3% set by the national government. The government lifted the limit up to 4% for 2011 which meant that they admitted their inability to cope with inflation.
China has been undertaking drastic measures to reduce liquidity since the last year. The statutory reserve requirement was brought higher for seven times since the beginning of 2010. Earlier, the Central Bank of China had been conducting a mild policy to overcome the financial crisis aftermath and maintain economic growth. Yet, at present inflation appears to Beijing a more serious threat than growth deceleration.
