China inflation rate is "still low" ? come from stock-market-today.cc
The Governor of the Central Bank of China Zhou Xiaochuan said Feb. 9 that China inflation rate remains "relatively low" in a context of debate among officials and economists about knowing when they should policymakers raise rates interest in order to contain rising inflation and asset prices.
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China inflation rate must still be "closely monitored", said Mr Zhou told reporters he met in Sydney after a meeting with other governors of central banks. The index of consumer prices, a major gauge of China inflation rate, rose 1.9% in December, against 0.6% in November, due to strong liquidity in China.
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China had initiated its economic stimulus plan in late 2008, to maintain stable economic growth. Chinese banks have granted to 9,600 billion yuan (1,400 billion U.S. dollars) in loans in 2009, nearly twice that in 2008, and forecasts prepared for January evoke the figure of 1300 billion yuan . The rapid rise in China inflation rate, along with rising property prices have led some to expect an imminent rise in interest rates.
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The stock market also declined in recent days, investors are expecting more restrictive policies, following the Decisions of countries to raise the compulsory reserve ratio of commercial banks and to place restrictions on property transactions. But Dai Xianglong, president of the influential National Social Security Fund, said during a speech in India on Monday it was unlikely that China raised its interest rates during the first half of 2010, economic recovery is still somewhat fragile.
Dai, former governor of the Central Bank, believes that despite possible adjustment of policy to combat China inflation rate and asset bubbles, the availability of funds and terms of loans should be fairly flexible throughout this year. "Raising interest rates is not the best tool available if policy makers want to control China inflation rate," said Zuo Xiaolei, chief economist at China Galaxy Securities.
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