China will not raise interest rates again before the release of May economic data, Bloomberg reported on Tuesday.

Zhou Xiaochuan, governor of the People's Bank of China (PBOC), the central bank, said the country has no "immediate" plan to raise interest rates and will wait for May economic data before deciding.

China's central bank governor Zhou Xiaochuan delivers a speech during the "Seminar on Financial Infrastructure" in Beijing June 6, 2006. China will wait to observe the impact on the economy of its late-April rise in interest rates before deciding whether to tighten credit further Zhou said on Tuesday. [Reuters]

"We are still monitoring the results of the last interest- rate increase, and there won't be any further measures immediately," Zhou was quoted as saying by the Bloomberg report.

China's central bank said May 31 that it will step up measures to cool a surge in lending and investment. Excessive investment in factories and real estate is driving raw-material prices higher, leading to pressure on inflation to accelerate, the bank said in its first-quarter monetary policy report.

Measures the central bank may use to rein in liquidity include raising the ratio the lenders are required to put aside as deposits and more aggressive open-market operations.

On April 28, the bank raised lending rates for the first time since October 2004, boosting the one-year benchmark rate by 0.27 of a percentage point to 5.85 percent in the government's strongest move yet to cool the economy verging on overheating.

The Chinese economy expanded by 10.2 percent in the first quarter from a year earlier, aided in part by hefty lending by banks. That raised fears of inflation and that already debt-laden banks could end up saddled with more bad loans.

M2, China's broadest measure of money supply, unexpectedly grew at a faster pace in April, rising 18.9 percent from a year earlier. New yuan loans in the first four months of the year totaled 1.58 trillion yuan, almost two-thirds of the central bank's target for the full year.