In December, amid growing concern about rising inflationary pressures, the government altered its monetary policy stance from "appropriately loose" to "prudent". In addition, the People's Bank of China (PBC, the central bank) has begun to raise interest rates, most recently in February, when it lifted the benchmark one-year lending rate from 5.81% to 6.06%. As worries grow about inflation, interest rates are likely to be increased steadily during 2011-12. However, the government's ability to control credit expansion through the state-owned banking sector means that quantitative controls on monetary and credit expansion are more important in policy terms than interest rates. The government will thus implement further increases in bank reserve requirements early in the forecast period to contain inflation. In addition, banks will be subject to monthly and quarterly credit quotas. The use of such quantitative means of controlling bank lending is not ideal, as credit quotas penalise small and medium-sized enterprises in the private sector that lack political connections. It also looks increasingly ineffective, given that credit targets were exceeded considerably in 2010. The PBC will seek to move gradually towards a system that relies more heavily on interest rates in 2011-15.