Hu Xiaolian, deputy governor of the People’s Bank of China (PBoC), said the country’s central bank will strengthen liquidity management to "normalize" monetary conditions, Bloomberg reported. In a statement posted on the PBoC’s website, Hu acknowledged that staying within the government’s US$1.1 trillion target for new lending in 2010 would be difficult, and that regulators would work to control the pace of bank lending for the rest of the year. Hu’s remarks may signal an end to the current "moderately loose" monetary policy pursued by the central bank to stimulate growth as the global economy lags. The central bank has raised banks’ required reserve ratios twice in recent weeks in an effort to mop up liquidity and slow the country’s inflation, which reached 4.4% in October.
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