China central bank raised interest rates for the second time in just over a month on Tuesday in a bid to rein in inflation as inflation stayed above 4 percent for a third month.

Annual inflation slowed to 4.6 percent in December but is expected to rise further as the cost of food and commodities continues to increase.

The benchmark one-year deposit rates will be lifted by 25 basis points to 3 percent, effective tomorrow, while one-year lending rate will raised by 25 basis points to 6.06 percent.

The latest decision will show effects on metal and oil prices on concerns that the move would slow down the world’s second largest economy and demand for commodities will weaken.

U.S. futures pared earlier gains, oil futures declined 1.33 percent to $86.32/barrel and copper futures fell 0.74 percent after Chinese interest rate news.

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