The People's Bank of China (PBOC), China's central bank, is likely to increase the benchmark interest rate by another 25 basis points before the year's end, said chief economist for Greater China at HSBC, Qu Hongbin in his latest report.

According to Qu, the PBOC conducted the recent rate hike in order to curb home prices and answer peoples' concerns about a negative real interest rate. He believes that the central bank can easily achieve this goal with another 25-bps rate hike. As a result, there won't be any rate hikes next year.

China's consumer price index (CPI) rose by 3.6 percent year-on-year in September, marking a record high in 23 months. However, inflation has peaked, said Qu. He expects the CPI to fall below 3 percent by the end of the year.

The HSBC also expects China's economic growth for the rest of 2010 to slow to about 9 percent from the 9.6 percent of the third quarter, Qu said in the report.

China's business press carried the story above on Tuesday. China.org.cn has not checked the stories and does not vouch for their accuracy.