Official: Interest rate change must be gradual
(AP)
Updated: 2006-07-25 15:47
China needs to monitor its economy further before making any decision about
whether to change interest rates, a government official said Tuesday.
Han Yongwen, spokesman for China's top planning agency, the National
Development and Reform Commission, made the comment to Dow Jones Newswires when
asked whether the government would raise interest rates.
Economists are speculating that the central bank may lift rates to cool an
economic boom after the government reported last week that growth in the second
quarter surged 11.2 percent, its fastest rate in a decade. Chinese leaders worry
that the sizzling growth could accelerate inflation or create a glut of
construction projects, which in turn could cause developers to default on loans.
The central bank raised a key lending rate 27 basis points to 5.85 percent in
April, and has also imposed controls meant to restrain bank lending and
construction.
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