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        China's CPI to be no higher than 6%: brokerages

        Updated: 2011-09-02 17:31

        (Xinhua)

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        BEIJING - China's consumer price index (CPI), a main gauge of inflation, will stay no higher than 6 percent in August on the back of more stable food prices, the Shanghai Securities News cited brokers as saying on Friday.

        Of the country's four major brokers, including China International Capital Corporation (CICC), Shenyin & Wanguo Securities, Guotai Junan Securities and Essence Securities, three forecast the CPI will grow 6 percent year-on-year in August, the report said.

        Essence Securities predicted the August CPI at 5.9 percent.

        Food prices, which account for one third of the CPI calculation, saw moderate month-on-month declines in August mainly attributed to lower vegetable and fruit prices and stabilized pork prices, according to data calculated by Essence Securities with figures from the National Bureau of Statistics and the Ministry of Commerce.

        "Pork prices are highly likely to take a downward path in the fourth quarter," said Gao Shanwen, a chief economist with Essence Securities.

        Since the average lending rate is at a high level and inflation will be eased, another interest rate hike seems unnecessary in the following months, said Guotai Junan Securities.

        The CICC said the chance for the central bank to raise banks' reserve requirement ratio (RRR) is also slight, but it does not necessarily mean policy relaxation. The government will continue a prudent monetary policy.

        The country's CPI surged to a 37-month high of 6.5 percent in July, well above the government's target ceiling of 4 percent.

        To mop up liquidity and stabilize prices, the central bank has raised benchmark interest rates three times and the RRR six times this year.

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