Amid growing concern about rising inflationary pressures, in early December the government altered its monetary stance from "appropriately loose" to "prudent". This came after the People's Bank of China (PBC, the central bank) had raised benchmark one-year lending rates by 25 basis points, to 5.56%, in October-the first interest rate rise since December 2007. 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 arguably more important in policy terms than the lending rate. The government will thus implement further increases in bank reserve requirements early in the forecast period to ward off an acceleration in inflation. In addition to reserve requirements, banks will also be subject to monthly and quarterly credit quotas. The Economist Intelligence Unit forecasts that credit expansion will be managed carefully in the next couple of years to slow the pace of money supply growth. The target for new lending in 2011 will be set lower than the goal of Rmb7.5trn (US$1.2trn) for 2010. 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. The PBC will seek to move towards a system that relies more strongly on interest rates in 2011-15.