Further tightening measures are possible if excess money-market liquidity continues, said central bank governor Zhou Xiaochuan, according to the South China Morning Post. The People's Bank of China announced on Friday that it would lift the reserve requirement ratio for the country's banks by 50 basis points from next week to curb liquidity growth. It is the fourth hike in seven months. Zhou's comments Tuesday may boost expectations of further tightening in 2007 and some economists believe the bank will maintain a relatively tight monetary policy. Frank Gong, managing director and chief China research economist at JPMorgan Securities, told the newspaper that three more reserve requirement ratio raises may be expected throughout 2007. Meanwhile, government think tanks claimed that Beijing would introduce a package of tightening measures this year.
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