BEIJING: China will continue to tighten monetary policy, as the world’s second-largest economy tries to tame inflation, according to the central bank chief.
People’s Bank of China Governor Zhou Xiaochuan said policymakers will use various measures to control the high rate of inflation, but warned that too many interest rate hikes would attract “hot money”, according to Caijing Magazine.
The politically-sensitive consumer price index rose 5.4 per cent year-on-year in March – well above the government’s 2011 target of four per cent, and fuelled expectations of further interest rate hikes and lending restrictions.
Zhou said China would also increase the flexibility of the yuan exchange rate – a move analysts say will help policymakers control inflation and boost domestic consumption by making imported goods available at cheaper rates.
Published in The Express Tribune, April 17th, 2011.
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