Forex News – China inflation falls slightly on slower growth but interest rates unchanged

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China’s growth has moderated as headline inflation came in slightly lower but in line with expectations.

The consumer price index rose 6.1 percent in September from a year earlier, a touch easier than August’s reading of 6.3 percent, lending support to views the central bank of China will opt to keep interest rates unchanged.

Even if the pace of growth slowed in the world’s second largest economy, domestic demand is expected to stay solid over the medium-term and most analysts still expect China to grow at least 9 percent this year.

Despite the inflation rate ticking lower in September, it is still close to the three-year peak of 6.5 percent hit in July.

“The slowdown in the CPI last month is not drastic enough to reduce inflationary expectations, and it is still too early to confirm an easing trend in price pressures,” said Qiao Yongyuan, an analyst with CEBM in Shanghai.

“The central bank is more likely to keep its current monetary stance unchanged and will wait for data in coming months to judge the direction of policy,” Qiao said.