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Beijing may raise interest rates, reserve requirements

The Beijing government may raise both interest rates and bank reserve requirements in yet another step to slow growth in fixed-asset investments. An editorial published Thursday by the People's Bank of China suggested other measures could include reducing loan supplies and issuing central bank notes to reduce risks in the financial system, the South China Morning Post reported. This year's lending target may be set at US$335 billion, a 4% hike from 2006 but lower than expected. The central bank raised reserve requirements for the fifth time on February 25. China's broad M2 money supply grew 17.8% to US$4.6 trillion in February, above the 16% target set for 2007.

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