Wen: We are beating inflation

BEIJING - The government will be able to keep inflation in check, Premier Wen Jiabao said on Sunday, after the central bank raised interest rates for a second time in just over two months.
The central bank raised one-year lending and deposit interest rates by 25 basis points on Dec 26, after issuing a statement posted on its website on Saturday.
Steps taken in the past month, including price controls to curb speculation and monetary tightening, have started to produce results, Wen said in a radio broadcast.
The central government has raised the reserve requirement ratio for banks six consecutive times and increased interest rates twice this year to absorb excess liquidity in the market to support healthy economic development.
The State Council, China's cabinet, has also been trying to rein in food prices by increasing production of vegetables and other basic goods.
"I believe we can keep prices at a reasonable level through our efforts. As a major leader of the government, I have the responsibility and I have the confidence, too," Wen said, referring to large grain reserves as well as moves to support production by reducing and waiving taxes.
The country is facing inflationary pressure as the consumer price index (CPI), a main gauge of inflation, accelerated to a 28-month high of 5.1 percent in November.
This is the second time the central bank hiked interest rates in 2010 after it raised the benchmark lending and deposit rates by 25 basis points on Oct 20, for the first time in about two years.