China just lifted interest rates

Zhou Xiaochuan, governor of the People’s Bank of China. Feng Li/Getty Images

China has raised borrowing costs for open market operations, following the US Fed’s rate hike earlier this morning.

The People’s Bank of China (PBOC) raised the short-term 7-day reverse repo rate by 5 basis points to 2.50%, ForexLive reported.

China’s central bank also increased its medium-term lending facility by 5 basis points to 3.25%, along with a liquidity injection of 288 billion yuan.

According to ForexLive, the PBOC said the rate increases are a normal market reaction to the US Fed’s earlier rate rise, and accurately reflected current levels of supply and demand in the market.

The Chinese yuan (CNY) rose slightly in the wake of the news. Here’s the 5-minute price action from investing.com:

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