HONG KONG - THE head of China's central bank said on Tuesday that interest rates would likely be cut in the short term as Beijing moves to boost consumer spending to offset slowing exports.

'I estimate that from this year to early next year there will be, overall speaking, pressure for a rate cut,' said Zhou Xiaochuan, governor of the People's Bank of China.

'So interest rates should be gradually dropping,' he told Hong Kong broadcaster RTHK during a visit to the southern Chinese city for the Financial Stability Forum, a meeting of officials from various central banks.

Beijing has introduced a string of measures to try to boost domestic demand in recent months as the slowdown in the United States and Europe has damaged its crucial export sector.

It has cut interest rates four times since September, with the one-year lending rate dropping from 7.47 per cent to 5.58 per cent.

Mr Zhou said inflation, which was the central concern for the government in the first half of the year, was becoming less significant.

He said the consumer price index was 'falling faster than we imagined", reducing pressure to keep interest rates high.

China's headline inflation rate slowed to a 22-month low of 2.4 per cent in November. -- AFP