China monetary policy aimed at stable yuan: report
September 23, 2009
Adjustments to China's monetary policy are aimed at keeping the yuan stable, central bank governor Zhou Xiaochuan said in comments published Wednesday by state media.
"Against the current backdrop of the financial crisis, maintaining the value of the currency is one of the most important tasks of the central bank," Zhou said in an interview with China National Radio.
"The degree of how tight or loose our monetary policy is (the main factor) in determining the stability of the currency."
In the wide-ranging interview covering numerous aspects of policy-making at the People's Bank of China, Zhou said adjustments are increasingly made in coordination with or in response to moves by other central banks.
"The scope of monetary policies of some western nations are not small..., which means although you have a loose policy your moves might not have the intended effect or may not be as strong (as hoped)," he said.
"These are the challenges we are facing."
It was not immediately clear when Zhou gave the interview, but it is likely that it was before his current trip to the United States, where he is accompanying President Hu Jintao.
Top Chinese ministers have been giving interviews with state media ahead of the 60th anniversary of the founding of the People's Republic of China on October 1.
Zhou added that China would continue to work to control inflation in the face of expanding credit, but that the nation's economy could withstand price increases over two percent.
"Developed nations hope to target inflation at two percent, this is to say price rises each year are no higher than two percent," Zhou said.
"But for developing countries and economies in transformation, generally speaking, our target can be a little bit higher than those in the market-economy countries."
In an effort to counter the global financial crisis, Chinese banks issued 8.15 trillion yuan (R8.8 billion) in new loans in the first eight months of the year, exceeding a five trillion yuan target set for 2009.
The aggressive lending has sparked inflation fears, as well as concerns that some of the money has not been used to help the real economy, but has instead been put into asset markets for quick profit. - AFP
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