China to keep monetary policy stable

China will likely keep its monetary policy stable and on target in the second half as consumer inflation is expected to rise mildly within a reasonable range in the rest of the year, experts said.

Their comments came as China's consumer inflation accelerated to the highest level in two years, largely driven by surging pork prices, but it still managed to come in weaker than expected in July.

China's consumer price index, a main gauge of inflation, rose 2.7 percent year-on-year in July, following a 2.5 percent rise in the previous month, the National Bureau of Statistics said on Wednesday.

The growth in core CPI, which excludes volatile food and energy prices, came in at 0.8 percent year-on-year in July, following a 1 percent rise the previous month.

Zheng Houcheng, director of the Yingda Securities Research Institute, said the rise in July CPI was largely due to soaring pork prices as some producers were reluctant to sell hogs ready for the market.

Looking ahead, Zheng expects consumer prices may fluctuate in August, and the rise in CPI may struggle to surpass 3 percent year-on-year during the month.