PBoC says no need to raise interest rates

People’s Bank of China (PBoC) officials told the IMF at a consultation yesterday that they see little need to raise interest rates, Bloomberg reported. According to an IMF statement, PBoC officials said that "with a benign inflation outlook there was less need for higher nominal interest rates." The PBoC, which hasn’t raised interest rates since December 2008, is also wasy of encouraging inflows of hot money. The IMF says interest rates are close to zero in real terms and creating incentive problems. "Real interest rates will have to rise in combination with a number of other policies," said Nigel Chalk, mission chief to China for the IMF. The two parties also continued to disagree about the appropriate value of the renminbi. For all the disagreement, Beijing has nevertheless for the first time permitted the publication of the IMF’s annual report on the Chinese economy.