By Haozhou (chinadaily.com.cn)
Updated: 2007-09-21 15:25

The People's Bank of China may hike interest rates once or twice before this year, said a report released yesterday by the Industrial and Commercial Bank of China (ICBC), according to the Shanghai Securities News.

The report says that the central bank may continue to narrow the gap between loan and deposit benchmark interest rates by asymmetrically elevating them.

Although issuing 31.97 billion yuan (US$4.25 billion) special treasury bonds may have the same effect as raising the required deposit reserve ratio, the deposit reserve ratio may go up again in the last quarter this year, because it is a low-cost and simple solution, says the report.

The China Banking Regulatory Commission will take tough measures to control excessive lending and punish credit capital flow into the stock market, according to the report.

Meanwhile, it will strengthen examination process for personal loans, especially mortgage loans, and probably raise the threshold for loan application within this year, the report forecasts.