China to tighten rates twice by mid year: report (by Chris Oliver)

HONG KONG (MarketWatch) -- A senior government economist said China is on track to raise interest rates twice more in the current quarter, as it sharpens its policy on combating inflation, according to a report late Wednesday by the official Xinhua News Agency. The report cited Fan Jianping, head of the economic forecast department at the State Information Center, as saying he expects two additional rate hikes by the end of the first half, followed by a more stable period in terms of policy adjustments. Fan reportedly said China faces a near impossible task of keeping consumer-price inflation (CPI) below 4% for the year. Data showed that CPI rose 4.9% in February from a year earlier, while figures due out next week are expected to show the March CPI above 5%, the report said. China's central bank lifted lending and deposit rates in a quarter-percentage point move last week, the second tightening of its main policy rate this year.