China may take steps to curb credit growth
(Reuters)
Updated: 2006-04-26 11:41 China's central bank could take a series of steps
to rein in runaway credit growth, a senior official said on Wednesday.
Zhang Tao, deputy director general of the central bank's research
department, said the economy was growing fast with credit expansion well above
target.
Financial markets expect the central bank to raise lenders' reserve
requirements to put the brakes on loan growth.
Some economists are tipping extra measures, including stepped-up open market
operations, quotas on lending to overheating industries and possibly an increase
in the central bank's discount rate to slow the growth of bill finance -- a
common method of funding property development.
Asked by reporters on the sidelines of a construction forum whether a
comprehensive set of tightening steps was possible, Zhang said: "It's possible
that the central bank will take comprehensive measures, but it will depend on
circumstances."
He said he expected gross domestic product to grow about 9 percent this year,
down from 9.9 percent in 2005, with consumer price inflation of around 2 percent
compared with 1.8 percent last year.
"All the indicators show the economy is running at a very fast pace with low
inflation. But the availability of credit is well above target. There are many
structural problems that pose us very serious challenges," Zhang
said.
|