China raises interest rates to reign in tumbling Yuan

SHANGHAI, Feb 3 (Reuters) – China’s central bank raised lending rates on its standing lending facility (SLF) loans on Friday, two banking sources said.

The overnight rate for the SLF loan was raised to 3.1 percent from 2.75 percent, the rate for seven-day tenor to 3.35 percent from 3.25 percent, and the rate for one month to 3.7 percent from 3.6 percent, both sources told Reuters.

Sources also said the adjustment to interest rates was effective from February 3.

Earlier on Friday, People’s Bank of China raised the interest rate on open marekt operations by 10 basis points.

The moves will reinforce views that China’s central bank is moving to a tightening policy bias, but analysts expect its policy lending and deposit rates to remain unchanged for now, and say any further steps are likely to be gradual.

PBOC raised its medium-term lending facility (MLF) loans in late January.

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