Zhou Xiaochuan: no limit to the deposit reserve ratio ?

Ming Pao's central bank governor Zhou Xiaochuan said yesterday that the higher inflation rate in March are many factors, the appropriate monetary policy tightening will continue for some time, the deposit reserve ratio is no absolute upper limit, if the conditions change, boundaries will change.

China's inflation rate last month rose to 5.4% of the high level, though, the People's Bank did not immediately raise interest rates or raise the deposit reserve ratio, but Zhou Xiaochuan attended the Boao Forum for Asia's remarks to reporters during the period was unequivocal expresses the "tough" monetary policy trends.

Will continue to tighten monetary policy appropriately

He said the higher CPI in March is the Spring Festival, the lower over the same period last year, seasonal and other factors combined effect of, "to eliminate the currency higher inflation factors, monetary policy has changed from a moderately relaxed monetary policy steady This is to be tightened, the appropriate monetary policy tightening will continue for some time. "

He said the only advantage of interest rate policy can not say no defects, one drawback is that now the international community generally relatively abundant liquidity, China's interest rate policy with the words too hard may lead to hot money inflows is relatively large. However, China is a very large economy, depends on the amount of capital inflows, the current domestic inflation mainly domestic aggregate demand and aggregate supply relationship.

Since November last year, China has raised the deposit reserve ratio 6 times, a large bank deposit reserve rate has reached 20%, there are arguments that further increase the space is limited, otherwise it will affect the profitability of banks. Zhou Xiaochuan, said response to the question: "does not exist an absolute limit problems are depends on the conditions, in terms of international experience, there is no clear a scale."

"China's situation, in the past so many years we have double the balance of payments surplus, there is economic growth, is also used during the crisis, fiscal policy and expansionary monetary policy, leading to too much liquidity, too much and we have to come back."

Refers to the years of economic growth so that the excess liquidity

"Using the tool also depends on the extent of the reserve you can not pay for the interest, many countries do not pay interest, we are interest-bearing."

Zhou's remarks on monetary policy in no uncertain terms, but for the RMB exchange rate policy, he only quoted President Hu Jintao In January President visited the United States proposed to further enhance the flexibility of RMB exchange rate.

He said: "The general reference to the RMB exchange rate based on market supply and demand, but also consider the balance of international payments, one must also consider domestic enterprises to adjust the adaptive capacity, at home and abroad into account, the total should reflect the flexibility rather than what is expected to change in advance. "

When a reporter asked him in the process of appreciation, more than 3 trillion loss of foreign exchange reserves may be the book, how to do, Zhou Xiaochuan, speaking up only to say that this issue is very complex, since we look for opportunities to repeat the last lesson.

source:http://news.sina.com.hk

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