An HSBC senior China economist said he expected China to announce another interest rate hike in 2005, but would likely leave its decade-old foreign exchange regime unchanged to ensure a soft landing for the domestic economy. Qu Hongbin told a news briefing in Beijing that a rate rise of another 27 basis points was likely in the first half of 2005, as a result of lingering inflationary pressure and overheating investment growth. Last October, in its first rate rise in more than nine years, China raised its one-year lending and deposit rates by 27 basis points. Qu said further rate hikes in the U.S. in 2005, would "provide a good environment for China to raise its interest rates". Turning to the question of the yuan, he said that while any revaluation may push down costs of imported raw materials and relieve inflationary pressure, lower prices could in turn spur more investment.