China likely to increase interest rates again

China is likely to increase interest rates further in the short term to curb inflation, according to some analysts.

''A let-up of the government's tightening measures in the third quarter should not be expected,'' said chief economist Li Xunlei of Guotai Junan Securities to the Securities Daily newspaper.

The possibility of more interest rate hikes in the third quarter can not be ruled out, he added.

The Chinese government is scheduled to announce the consumer price index this week.

Last month the CPI, the main gauge of inflation, intensified to a three-year high of 6.4 per cent y-o-y. (See: China's June CPI index touches three-year high of 6.4 per cent)

China's central bank has raised interest rates three times and has raised the reserve requirement ratio for banks six times this year to tighten monetary supply and to curb rising inflation (See: China raises interest rate by 25 bps for the third time this year.)