Central bank to maintain RMB interest rate
(chinadaily.com.cn)
Updated: 2004-03-11 15:22

People's Bank of China Governor Zhou Xiaochuan Thursday ruled out the possibility of a raise in interest rate this month as the current rise in consumer price index (CPI) has not yet reached the level for an interest rate adjustment.

"As for the policy for next month or a longer period in the future, we have to make further observation," said Zhou Xiaochuan, governor of the People's Bank of China.

The central bank will keep a close watch of the country's economic development and price changes and will decide whether to readjust the monetary policies, Zhou said at a press conference held on the sidelines of the annual session of the national legislature. 

After increasing the money supply to keep the economy growing quickly and fight the deflation which emerged during the Asian financial crisis of 1997-98, the central bank began tightening credit last year.

With the aim of further controlling the money supply, the central bank also issued a rule last year tightening controls on loans to the fast-growing real estate industry.

According to him, the central bank will make timely, proper adjustments to the monetary policies according to changes in the situation.

Zhou said the government would wait a few months to see the consumer price trend before making any decisions.

China's consumer price index (CPI), policy-makers' key inflation gauge, rose a year-on-year 3.2 per cent in January and last December, the highest since April 1997 when it was also increased 3.2 per cent year-on-year.

China notched up 9.1 per cent economic growth last year, fuelled by 26.7 per cent growth in fixed asset investments.

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