China's inflation at 28-month high of 5 pc in Nov

Inflation was driven by a 11.7 per cent surge in food prices, which accounts for one third of the basket of goods used to calculate China's Consumer Price Index (CPI), Sheng Laiyun, spokesman for China's National Bureau of Statistics (NBS) told media today.

"Prices will stay stable in the following period of time as long as ministries and regional authorities seriously implement the central government's measures on checking prices," state run Xinhua newsagency quoted him as saying.

From January to November, CPI rose by 3.2 per cent year- on-year (Y-O-Y), surpassing the government's target of three per cent for the year. Yesterday, China's Central Bank raised for the third time the reserve requirement ratio (RRR) for banks in a month to curb lending.

The People's Bank of China (PBOC) said it would lift the bank RRR by 50 basis points from December 20. Banks will have to set aside 18.5 per cent of their reserves after the sixth such hike this year.

The move came after the PBOC said that the new yuan loans in November stood at 564 billion yuan (USD 84.7 billion). The figure added up to a total of 7.45 trillion yuan of new loans in the first 11 months of the year, just falling short of the government's 7.5-trillion-yuan full-year target.

The Producer Price Index (PPI) for China's industrial products rose 6.1 per cent Y-O-Y in November, compared with a 5.0 per cent gain in October. Liu Yuanchun, professor with the Beijing-based Renmin University of China, said the November's CPI might be the peak of the year.