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Expert expects more interest rate rises

04-07-2011 08:20 BJT

The central bank of China announced Tuesday it would raise the benchmark one-year borrowing and lending interest rate by 25 basis points from Wednesday. Our reporter, Ji Yi, went to Tsinghua University to hear what one professor thinks to the move.

This is the second time the central bank has raised the benchmark interest rate this year, and the fourth increase since the start of 2010.

Professor Li says this cycle of interest rate rises is just the beginning. After many years of an easing policy,China's money supply is excessive, and it's time to tighten monetary policy.

Professor Li also stresses that one primary concern over the Chinese interest rate system is that even though the Central Bank has been raising the interest rate, the spread between the lending and deposit rate is increasing.

In the past couple of months, the Central Bank has raised the interest rate every 2 months, so, and Li expects, another rise at the end of May, and two more through the year.

Editor:Xiong Qu |Source: CNTV.CN

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