Ex-official: Central bank says rate cuts are 'fine-tuning'

Former People’s Bank of China (PBOC) Vice-Governor Wu Xiaoling said the central bank’s recent reduction of interest rates and reserve requirement ratios for banks represented a fine-tuning of its tight monetary policy rather than a shift toward a looser stance, the South China Morning Post reported. On Tuesday, the PBOC cut the base lending rate by 27 basis points, reducing it for the first time in four years, and lowered reserve requirements by a percentage point for all but the country’s six largest banks. Wu said loose monetary policy would hurt the central bank’s fight against inflation, and that it would need to curb growth of the broad money supply. Wu, who stepped down as central bank vice governor earlier this year, is now a vice chairman of the Financial and Economic Affairs Committee of the National People’s Congress.