China's central bank signaled increased concern over the recent pickup in inflation by announcing its third increase in interest rates this year. Authorities also slashed a tax on interest income from bank deposits, effectively pushing deposit rates even higher.

The moves, announced Friday, had been expected for weeks by economists and investors. The case for higher interest rates was apparently clinched by data issued Thursday showing the economy grew far faster than expected in the second quarter. China is now on track for its fastest annual growth since 1994.