BEIJING, April 27 (Xinhua) -- China on Thursday announced a 0.27 percentage points hike in the benchmark one-year loan interest rate, according to a central bank statement, as part of its efforts to curb an investment binge and prevent economic overheating.

    The People's Bank of China said the one-year loan rate will, starting Friday, rise from 5.58 percent to 5.85 percent. Loans of other terms will be adjusted correspondingly.

    The move is to "further consolidate the macro-control effects, keep in place a sound trend in the sustained, fast, coordinated, and healthy development of national economy and continue to let economic means play a role in resource allocation and macro-control," the statement said.

    China's economy, fueled by strong investment, soared by a higher-than-expected 10.2 percent in the first quarter, even though a government spokesman one week ago dismissed fears that the world's fastest-growing major economy might be overheated.

    Zheng Jingping, a spokesman for the National Bureau of Statistics told a press conference that "the growth seems to be on the fast side, but I want to say such a rate still falls in the range of the potential economic growth. It remains basically normal, though touching the upper limit."

    He acknowledged, however that, "It should arouse concern, and actually has caught our attention."

    Investments in roads, factory equipment and other fixed assets, the biggest driving force for China's economy for many years, totaled 1.39 trillion yuan in the first three months, growing a sharp 27.7 percent over the same period last year. The growth rate in first quarter this year was 4.9 percentage points higher than last year's first quarter growth rate.

    Domestic banks have consumed roughly half of their lending target for the whole year, adding 1.26 trillion yuan in loans, up 13.98 percent from a year ago.

    The State Council, or China's Cabinet, outlined moves at a recent executive meeting chaired by Premier Wen Jiabao to avert possible overheating by tightening controls on investment and money supply.

    The central bank statement said all financial institutions should strictly exercise interest rate policies and ensure a smooth adjustment of loan rates.

    Meanwhile, it announced no change in deposit rates.

    Though China has officially scrapped the upper limit for loan interest rates and lower limit for deposit rates, state-controlled commercial banks provide the same interest rates: the central bank-set benchmark rates. Enditem