BEIJING – China is likely to raise the interest rate in the first quarter to keep a lid on the rising consumer prices, Li Daokui, an adviser to the central bank, said on Tuesday.

“Because of seasonal factors, the (inflation) pressure is rather high in the beginning of the year,” the adviser to the People’s Bank of China told reporters.

Therefore, there is a reason to believe that China will increase the interest rates in the first quarter, he said.

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Li predicted the consumer price index (CPI), a major gauge of inflation, will jump 3.9 percent this year, slightly below the government’s target of 4 percent.

China’s CPI rose by 5.1 percent in November, a 28-month high. The December CPI figure is due on Thursday.

Li also said that China will continue to lift the required reserve ratios to freeze more capital that is available for lending.

China’s central bank told lenders on Jan 14 to hold more deposits as reserves for the fourth time in two months, lifting required ratios by half a percentage point.