China's Need to Raise Interest Rates Less Pressing, PBOC Adviser Li Says

SHANGHAI, Jun. 28 -- The need for China to raise interest rates is less pressing now that inflation expectations are easing, Li Daokui, an adviser to the People's Bank of China, said in Shanghai.

"The goal of raising interest rates is to manage inflation expectations,"he told reporters at a conference. "If inflation expectations are easing, even though inflation is rising by more than 3 percent, there is no basis for a rate increase."

Li said inflation expectations are not as strong as they were a couple of months ago before the Chinese stock markets declined. "This should be a new factor to be taken into consideration"in any decision to raise interest rates, he said.