Interest rates on the inter-bank market, after days of increasing, rose sharply again on Wednesday, China Securities Journal reported. The rise shows the effectiveness of the recently issued tightening monetary policies.

Collateral repo rates and inter-bank lending rates of all terms broke 5 percent, according to the report.

According to data from Wind Info, weighted average interest rates of one day, seven days, 14 days, 21 days, one month, two months, three months and six months pledged repos were all just over 5 percent. Interest rates of one day and seven days pledged repo increased by 0.5173 and 0.5447 percentage points compared with the previous trading day, the newspaper reported.

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Inter-bank lending rates of one day, seven days, 14 days, 21 days, one month and three months all rose to over 5 percent. One-day and seven-day rates rose over 0.5 percent from the previous day.

Analysts said, according to the China Banking Regulatory Commission's latest requirements, the daily average loan-to-deposit ratio of commercial banks should not exceed 75 percent. Moreover, the current 21-percent deposit requirement ratio, intensive issuance of subordinated debts and the recent intensive capital consumption of mainstream institutions led to tight liquidity in the interbank market. As a result, interest rates will go up, the newspaper reported.

An unnamed trader said the tight liquidity was a normal reaction to the tight monetary policy. He predicted that it is unlikely that the central bank will adjust the reserved requirement ratio any time soon, according to the report.