Central Bank to Suspend Bill Sales on Thursday

BEIJING, Jun. 23 -- The People's Bank of China, the country's central bank, said on Wednesday that it will suspend bill sales scheduled on Thursday, according to a statement on its website.

However, the brief statement did not elaborate on the reason for the action.

Analysts said the move is being made in response to tightened market liquidity conditions, which increases the possibility that the central bank will soon raise its interest rates again.

The central bank previously suspended bill sales on January 24 of this year. It raised its interest rates two weeks after the suspension.

The central bank has raised its interest rates twice and hiked its reserve requirement ratio for banks six times this year to mop up excessive liquidity, which has helped to fuel the country's skyrocketing inflation rate.

The inflation rate remains stubbornly high, defying the government's efforts to stem price rises. It was widely expected that June's inflation rate will continue accelerating after reaching a 34-month high of 5.5 percent in May.