Tools: Save | Print | E-mail | Most Read
Central Bank Vows to Damp Excess Liquidity, Credit Growth
Adjust font size:

The central bank said yesterday it will stick to its sound monetary policy and continue to use a variety of tools to control liquidity and credit growth.

 

"The central bank will continue to strengthen liquidity management and resort to comprehensive measures to keep the money supply and credit growth in check," the People's Bank of China said in its third-quarter monetary policy performance report released yesterday.

 

The overall performance of the financial sector was stable in the third quarter, with the pace of money supply growth decelerating and credit growth slowing down slightly, the central bank said in the report.

 

China's economy is expected to maintain stable and rapid growth, but the slowing pace of the money supply and credit growth is not solid enough, it said.

 

In the past, some commercial banks have used excess cash to pump loans into China's red-hot economy.

 

The central bank said soaking up excess liquidity by resorting to open market operations alone is not enough, given that commercial banks are now awash with cash.

 

A combination of issuing central bank bills and raising the bank's reserve requirement ratio to manage liquidity is a practical measure, the central bank said in the report.

 

The bank has so far raised the bank reserve requirement ratio the proportion of deposits that commercial banks are required to hold with the central bank three times since April, with the latest one taking effect yesterday.

 

But the central bank said a modest hike in the bank reserve requirement ratio is a fine-tuning measure, "not a heavy dose of medicine."

 

While maintaining the importance of liquidity management, the central bank yesterday stressed it should accelerate structural economic adjustments and put into place policies aimed at expanding domestic consumption.

 

(China Daily November 15, 2006)

 

Tools: Save | Print | E-mail | Most Read

Related Stories
M2 Growth Bounces Back in October
Risks of Runaway Credit Remains: Official
China to Ensure 'Prudent Growth' in Bank Loans
New Loans, Money Supply Slow Down in Growth

Product Directory
China Search
Country Search
Hot Buys
SiteMap | About Us | RSS | Newsletter | Feedback
SEARCH THIS SITE
Copyright © China.org.cn. All Rights Reserved     E-mail: webmaster@china.org.cn Tel: 86-10-88828000 京ICP证 040089号