Interest rate hikes an effective economic tool

For the fourth time this year, the People's Bank of China, the central bank, raised interests rates on Wednesday.

The interest rate on bank deposits was raised by 27 basis points, and the lending rate by 18 basis points. After the hikes, the benchmark one-year deposit rate is now 3.6 percent while one-year lending rate is 7.02 percent.

The central bank said it raised the interest rate to "control money supply and credit, and stabilize inflation expectation".