China May Pause After Third Rate Move as Wen Bets Inflation ‘Controllable’

China may limit interest-rate increases for the rest of this year as Premier Wen Jiabao bets that a slowing economy will help tame inflation after five moves since mid-October.

A quarter-point boost to one-year lending and deposit rates from today may be the last for 2011, according to JPMorgan Chase & Co., HSBC Holdings Plc and Bank of America Merrill Lynch. Nomura Holdings Inc. predicts one more move, this quarter.

The ruling Communist Party may delay further increases because of signs of weakness in manufacturing and export demand and to avoid attracting more speculative capital to the fastest- growing major economy. The central bank moved before a report that may show consumer prices rose more than 6 percent last month, the biggest gain since July 2008 and a likely peak for this year, according to JPMorgan.

Read Full Article from Bloomberg

- Posted: 2011-07-06 14:18:34

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