China's central bank raised its benchmark interest rate by 0.27 percentage points Saturday. The main bank lending rate rose to 6.84 percent and the deposit rate increased to 3.33 percent.

The move was intended to encourage "rational growth in credit and investment" and keep inflation stable, the bank said in a statement, amid fears uncontrolled expansion could push the economy into the buffers.

Analysts had expected measures to slow the economy after official figures earlier this week showed it expanded by 11.9 percent in the second quarter and by 11.5 percent for the first half of the year.

But some experts said the rate hike by itself might not cool the economy down enough, with inflation already hitting 4.4 percent in June.

"We believe the government has placed priority on market mechanisms to cool the economy, but we cannot rule out the possibility of more administrative measures," Li Huiyong, a Shanghai-based economist with Shenyin Wanguo Securities, told AFP.