SHANGHAI Feb 3 China's central bank surprised
financial markets on Friday by increasing the interest rates on
open market operations by 10 basis points, on the first day back
from the long Lunar New Year holidays.
The seven-day open market operations rate was raised to 2.35
percent from 2.25 percent, the rate for 14-day tenor to 2.50
percent from 2.40 percent, and the rate for 28-day tenor to 2.65
percent compared with the previous 2.55 percent, the People's
Bank of China said in a statement on Friday.
On the same day, the central bank drained a net 70 billion
yuan ($10.19 billion) through open market operations.
The move is likely to reinforce views that China's central
bank is slowly moving to a tightening policy bias, but analysts
expect benchmark interest rates to remain unchanged and say any
further steps are likely to be gradual.
($1 = 6.8721 Chinese yuan renminbi)
(Reporting by Shanghai Newsroom; Editing by Kim Coghill)