Even the denial by vice governor of the People's Bank of China (PBOC) Wu Xiaoling could not blow away the market's speculation that the central bank would issue new policies to push forward the foreign exchange reform, said a report in International Finance News.

Instead, it is more and more expected that the government will publish new macro-control policies in the market, fuelled by latest statistics. According to a report released by Morgan Stanley on July 11, China was expected to raise the deposit and lending interest rates by 27 points and would further raise these rates at the end of this year.

Analysts said that the further adoption of the control policies depends on the effect of the policies implemented during the first phase. After the foreign trade surplus hit the new record high of $14.5 billion, the data of bank credit further proved that the overheating economy had not been cooled down by the previous control policies.

Increasing both the deposit and lending interest rates might very possibly be included in the new control policies. Persons related with the industry said that the latest increase of the lending interest rates was criticized for widening the rate gap and stimulating banks to increase the loans. It is impossible for the central bank only to raise the lending interest rates, they said, for this will further widen the interest rate gap as far as the current control effect is concerned.

Some experts said the reason why China was reluctant to raise the saving interest rate was the strong speculation of RMB appreciation. But now the Fed has raised interest rates by 25 points again and the market is expecting another hike in August. So the pressure of RMB appreciation will not be increased if the deposit rates of RMB are raised by an appropriate margin.

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