August CPI Innovation High raise interest rate into focus

-Morning News reporter Liu Zhifei August CPI year-on-year Growth hit 3.5% of the 22-month high, and CPI two consecutive months higher than the beginning of the 3% target value set, triggered the market on whether the recent interest rate speculation.　　Institutions are beginning to diverge on expectations of higher rates. Whether to raise interest rate differences between the larger Central Bank monetary Policy Committee, Li, September 11 in an interview with CCTV "Economic Information network", said that China's current liquidity is more abundant, the economic recovery is also very good, in this case, there is no need to adhere to excessively loose monetary policy, can consider raising interest rates. However, he stressed that he was referring to deposit interest rates. Li believes that the absolute level of liquidity in our country is sufficient at present.　　At the end of August, the broad currency M2 had reached $10 trillion trillion, more than 10 trillion dollars, more than the United States, is twice the liquidity of the stock market enough to support the economic operation. However, there are also different opinions in the market, the senior economist Lu County, Societe Generale, said that because of the economic slowdown, the CPI will eventually start to fall after November, so the interest rate hike in the year is not necessary.　　For the reserve requirement ratio, unless international capital inflow intensity recovers, otherwise, the year also basically did not raise the space. Yan Wei, chief economist for Oriental Securities, said the rate hike was actually not directly linked to the current CPI trend. The rise in prices is actually determined by the supply and demand relationship. Tightening liquidity and reducing the money supply will not directly affect the supply-demand relationship. The rise in prices is not a result of a rush to buy money, but a seasonal cause of the imbalance between supply and demand.　　Raising interest rates does not immediately change this supply-demand paradox. CPI inflation may fall in fact, whether the central bank chose to raise interest rates, but also to reference the future trend of CPI and monetary easing. If the CPI continues to rise in the future, central bank interest rate is unavoidable. For future CPI trends, most experts are generally expected to be high after the pre-low. He expects CPI to peak at the end of the three quarter of this year, to 3.7% or even higher, due to the trailing factors and signs of a slowing economy. He predicts the CPI will gradually decline in the quarter, at around 2.9% a year. Liu Yuhui, director of the China Economic Evaluation Center at the Institute of Finance at the Chinese Academy of Social Sciences, said the 3.5% per cent increase could be the highest level of CPI this year.　　"The Financial Research Center of the Bank of Communications, September 11, said the study, in the disastrous weather, demand-driven factors such as the weakening of inflation, price trend inflection point is coming, the future inflationary pressure will be eased, the CPI will be a smooth decline." Liu Dezhong, chief economist and director of Minmetals Securities, said that from the analysis of the CPI higher factor, CPI in the third quarter continued to rise to 3.5% of the rate hike to the critical point, is not systematic and integrated factors, is unsustainable, the CPI in the fourth quarter will certainly fall back.