China to raise benchmark rates

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In the first such move since 2007, the nation's central bank is set to increase the deposit rate to 2.5% and the lending rate to 5.56%. Analysts say the action could begin to remedy China's soaring housing prices, accelerating inflation.

Reporting from Beijing , In a surprise move that many economists were calling for, China's central bank said Tuesday it would hike its benchmark lending and deposit rates for the first time in three years.

The move is the clearest sign yet that policymakers are concerned about excess liquidity and over-investment in the world's second-largest economy.

China has been deluged with easy money since the country's banks issued a record $1.4 trillion last year to combat the effects of the global financial crisis.