China's annual consumer inflation rate dropped in November to 4.2 per cent from a year ago, its lowest level in more than a year, the country's National Bureau of Statistics said Friday.

With the latest figure, the country expects its federal government to relax some of its monetary policies in order to battle weakening domestic and international economic conditions.

Beijing may push further cuts in bank reserves to free up cash for lending, analysts said.

"It's clear now that China's inflation is easing, and the process of easing is faster than expected," economist Wang Guobing said in Reuters News. "But it's still too early to say that China will turn to a full and complete policy relaxation," he said.

"Inflation will hover around 4 per cent in the coming months, and the government still has to seek a balance between growth and inflation control," Wang added.

The rate has fallen since hitting a three-year high of 6.5 per cent in July. It is also almost a pace closer to government's full-year target of 4 per cent for 2011. China's official October inflation was 5.5 per cent.

China's central bank cut its reserve requirement for banks last week, a first in three years. It was a move seen as a monetary easing to keep the economy ahead an annual rate of above 8 per cent.

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