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China raises market borrowing costs after Fed hike

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China raises market borrowing costs after Fed hike

China's central bank increased its money market interest rates Dec. 14 hours after the Federal Reserve raised interest rates, media reports said.

People's Bank of China increased the cost of seven-day and 28-day reverse-repurchase agreements by five basis points. It also raised rates on its medium-term lending facility by five basis points.

In a statement accompanying the rate increases, the PBOC said the upward adjustment was a "normal market reaction" to the Fed's rate increase.

The bank said the adjustment would help shape "reasonable" interest rate expectations.

The rate hike would also help prevent financial institutions from over-leveraging while helping control the macro leverage ratio, said a Reuters report.

China's domestic equity markets were slightly lower and Hong Kong's Hang Seng index was little changed in midday trade, said Bloomberg News.