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China interest rate hike may be imminent: state media
Written by Saumyatanu   
Friday, 10 December 2010 14:39

China interest rate hike may be imminent: state media


China may raise interest rates as early as the end of this week after Beijing pledged to tighten its monetary policy in 2011 to fight inflation, state media reported Tuesday.

There is a "sensitive policy window" for a rate hike this weekend, before the release on Monday of key economic indicators for November, including the consumer inflation reading, the official China Securities Journal said.

The nation's consumer price index (CPI) rose 4.4 percent year-on-year in October, well above the government's full-year target of three percent, with the prices of 18 types of vegetable increasing more than 60 percent.

"With reference to the central bank's practice of raising interest rates right before the release of CPI, there is a sensitive policy window around this weekend," the newspaper said, without citing any source.

A rate hike would support China's recent pledge to tighten up its monetary policy next year, the report added.

The ruling Communist party's politburo decided to shift its stance from "relatively loose" to "prudent" at a meeting chaired by President Hu Jintao on Friday, the Xinhua news agency reported.

The central bank hiked interest rates in October for the first time in nearly three years.

State media cited analysts as saying that by raising benchmark interest rates at that time, the central bank signalled to the market that rates may continue to be adjusted.