People's Bank of China chief Zhou Xiaochuan said Thursday that China may impose additional interest rate hikes and implement monetary policy measures to prevent overheating and control inflation, state media reported. This includes higher reserve ratios for commercial banks, more bond
sales, and interest rates hikes. Inflation fell to 6.2% from 6.5% the previous month after the central bank moved to raise borrowing costs and bank
reserve requirements, but further
economic tightening actions will still be taken. "The yuan will eventually
become a freely convertible currency and China will open its capital
account, even if we haven't set a clear timetable," the rumored-to-be outgoing chief said. Zhou said the bank
considers growth, inflation, employment and the international balance of
payments in setting the country's monetary policy.
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