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China's inflation rate in Q1 seen rising to 6.9%

China's inflation rate in Q1 seen rising to 6.9%

China's consumer inflation will hit 6.9 percent in the first quarter of this year, up from 6.6 percent in the fourth quarter of 2007, state media said yesterday, citing a key state think tank.
Economic growth will slow to 10.5 percent in the first quarter from 11.2 percent in the previous quarter, the China Securities Journal reported, citing a report from the State Information Center.
The report suggested authorities should stick to a tight monetary policy but avoid immediate interest rate hikes as faster price rises in the first quarter were mainly due to severe snowstorms this winter.
"Interest rates hikes should be suspended temporarily to avoid any drastic swings in the domestic stock market," the report said.
Instead, the report urged authorities to control growth in money supply through hikes in the reserve ratio, or the money commercial banks need to keep in reserve, and stepping up open market operations to mop up excess liquidity.
The consumer price index spiked to an 11-year high of 7.1 percent in January after severe winter weather hit China late in the month.


Updated : 2021-05-09 19:27 GMT+08:00