The Chinese government has raised pump prices for gasoline and diesel fuel by 300 yuan/metric ton (about $48), reversing a similar cut ordered last October.
The price hike is viewed as the government’s reduced concern over the country’s inflation, which is projected to come in at 4.1% for January. There is also some hope that the lower inflation rate will cause the government to lower bank reserves requirements, making it easier for businesses and consumers to get loans.
The Shanghai stock exchange rose nearly 2.5% today following the announcement.
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