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Bank of China said it would raise the rate of the RMB loan 5 5 31pc 56pc year and yuan year drops 2 5pc 2 25pc Wednesday rates.

The move reflects official concerned financial bubble property China and persistent inflation, with the consumer price index is expected to increase by 3 6pc-on-year in September.

However, the rate suddenly touring European poorly markets feet which reduces earnings earlier and caused oil prices to soak. Meanwhile, the dollar rose against all major currencies.

"The increase in interest rates is entirely outside the expectations of the market," said Zhu Jiangfang, Chief Economist at securities CITIC in Beijing.

"The Central Bank acting forward because the recent increase in headline inflation rate real interest in negative territory."

China is due to report the figure of his domestic product gross third quarter and other economic data Thursday and some analysts have speculated that the figures would enter into more strongly than expected.

Prior to the increase in interest rates, the consensus was that the economy developed by approximately 9 5pc-on-year last quarter, down from 10 3pc in the second quarter.

"This is a surprise, but welcome, randonnée.Elle suggests high inflation and figures of GDP Thursday, but also some concerns about property," said Ben Simpfendorfer, Chief Economist at the Royal Bank of Scotland."

Key meeting late last week to discuss the next five years of China's leaders, has promised to focus more on economic growth "inclusive", was widely interpreted as a slower, but more widely shared, expansion would contribute to the Chinese economy rebalancing and boost domestic consumption.

"We have long anticipated a rise in rates before the end of the year and intends to our current forecast of 50 basis points (0 5pc points), rate other hikes in 2011, said Nick Chamie's RBC.".

The move comes in advance of the meeting of the heads of the Group of 20 finance weekend rich countries and emerging in Korea of Sud.Il should be overshadowed by a dispute between China and on the evaluation of the yuan United States and growing fears of protectionist currency wars.

China is facing increasing political pressure to curb its economy led by investment and promote domestic demand in order to re-balance the global economy and reduce the huge trade surplus of the country.

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