Further economic tightening measures are expected after the People's Bank of China (PBOC) said it would adopt a pre-emptive monetary policy, the South China Morning Post reported. The statement appeared in the PBOC's first quarter monetary policy report, which appeared on its website Monday. Despite having raised interest rates for a third time in less than 12 months on February 18, the bank said it is still concerned about excessive liquidity in the banking system. There were no specific references to future policy actions but regulators said they would move to limit investment growth, credit and money supply growth. The PBOC also said it would allow more flexibility in its exchange system and work to improve the yuan's managed float. Control measures such as hiking interest rates and bank reserve requirements appear to have had limited effects in the past year. Bank lending jumped 36% in the first two months of 2007 to reach US$127 billion, nearly a third of last year's total. Meanwhile, the January-February trade surplus came to US$39.64 billion, more than double the corresponding 2006 figure.