Bank of China (BOC) has adjusted its forecasts of the year-on-year increase rate of China's consumer price index (CPI)this year from 5.5 percent to 6.5 percent, and is expected to increase interest rates in the second quarter this year, said the report issued by BOC's department of the global financial markets on Monday.

The report said the reason for the adjustment is that the depreciation of the dollar led to the increase of international crude oil, grain and other raw materials' price, which increased China's imported inflationary pressures.

The report also said China is possibly to take the so-called asymmetric-style to raise interest rates, which means that the deposit interest rate increase may higher than the lending rate increase.

Besides, the central bank or still improve the deposit reserve ratio this year and continue to recover the banking system liquidity by open-market operations. And it will cut the growth rate of gross domestic product (GDP) this year from 10 percent to 9.7 percent.

China's consumer price index is expected to show a rise of 8.3 percent in March from a year earlier, easing from the near 12-year-high of 8.7 percent in February, the report predicted. It added that the food price increase is still the major thrust of prices increases.

Crude oil Inflation China Price