A report released today by the State Information Center, a government body that operates under the National Development and Reform Commission, argues that given strong inflation expectations continue to impact on consumer spending growth, the central bank should further increase interest rates so as to counter the effect of “negative real interest rates.” China’s CPI has been running higher than the benchmark one-year deposit rate for more than one year, meaning that people who deposit their savings with Chinese financial institutions are actually losing money. Chinese consumer prices rose by 6.4% in the twelve months up to the end of June, a three-year high. After last week’s rate hike, official one-year deposit rates sit at 3.5%.

Source

China News Agency

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