China may raise interest rates for first time in more than a decade

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China may raise interest rates for first time in more than a decade

BEIJING (AFP) - China may raise local-currency interest rates for the first time in more than a decade as all other attempts to curb growth in consumer prices and investment have failed, according to economists.

Early signs of rising inflation may force China's policy makers to hike the deposit rate to make it more attractive to put money in the bank, resorting to a policy measure they have not tried their hand at since 1993.

"I expect the deposit rate will increase this year," said Wang Zhao, an economist with the Development Research Center, a think tank affiliated with the Cabinet. "When exactly depends on how the whole economy is operating."

China's economy expanded 9.1 percent last year, pulling much of Asia with it, and a decision to rein in growth could potentially have a devastating impact on the region.

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China may raise interest rates for first time in more than a decade