China September inflation dips to 6.1

With inflation still close to the three-year peak of 6.5 percent hit in July,few analysts believe China will soon ease policy,barring a marked deterioration in Europe8217;s debt woes.

This confirms that inflation peaked in July,said Chi Sun,an economist with Nomura in Hong Kong.

Policy will be on hold. We think inflation will slow down gradually in the coming months.

The consumer price index rose 0.5 percent in September from the previous month,after a 0.3 percent rise in August. Measured month-on-month,food prices rose 1.1 percent,while non-food prices were up 0.2 percent.

China8217;s producer price index in September came in below market expectations with a 6.5 percent rise from a year ago,compared with August8217;s 7.3 percent.

Economists polled by Reuters had forecast a 6.1 percent rise in the consumer price index and an increase of 6.8 percent in producer price index.

After lifting interest rates five times and banks8217; reserve requirements nine times since October 2010,Beijing has put policy tightening on hold as a faltering Europe and U.S. slowdown threaten global growth.

The central banks of Brazil and Indonesia have already cut interest rates over concern about a global economic slowdown.

Some analysts say China may relax monetary policy if push comes to shove,although milder moves such as relaxing credit restrictions and lowering banks8217; reserve requirements are likely to come before a more drastic rate cut.

Data showed on Thursday that China8217;s import and export growth eased in September,with export growth hitting seven-month lows,as domestic and overseas demand cooled.