China's central bank increased interest rates for the third time this year on Wednesday, making clear that taming inflation is a top priority even when as the economy slows gently.

Benchmark one-year lending rates will be raised 25 basis points to 6.56 percent, and benchmark one-year deposit rates will be raised 25 basis points to 3.5 percent, the central bank said in a short statement on its website.

The increases will take effect from Thursday.

Abundant liquidity and elevated commodity prices drove China's inflation to a 34-month high of 5.5 percent in May, unsettling Beijing which worries rising prices may stir social unrest.

(Reporting by Aileen Wang, Kevin Yao and Koh Gui Qing; Editing by Don Durfee)