China tightening will satisfy markets: cbank
BEIJING: China will tighten fiscal policy gradually in a manner "acceptable to the market", an academic adviser to the central bank said in remarks published on Tuesday following an interest rate rise.
Li Daokui was also cited by the 21st Century Business Herald as saying the government would tailor monetary policy settings differently for different banks next year, in line with their business operations.
" The central bank will remain gradual in its policy moves in the future and tighten at a pace and frequency that is acceptable to the market," Li said.
China increased interest rates for a second time in just over two months on Saturday to rein in inflation, which hit a 28-month high of 5.1 percent in the year to November.
" It's very necessary to raise interest rates right now," Li said.
"Policy decisions should mainly consider the Chinese economy, although there will be global hot money inflows."
He said t he 25-basispoint interest rate rise would ease inflationary expectations towards the end of the year. Consumer prices were expected to face high upward pressure because of Chinese New Year, which starts on February 3.
Chinese Premier Wen Jiabao said on Sunday that his government would be able to contain inflation and that the government would step up efforts to pull property prices back to a "reasonable" level.
Li said: "In my understanding, this means no overly fast rise. But if property prices fall, it will bring new problems to the Chinese economy."
It should be satisfactory if property price increases keep pace with consumer inflation, Li added. -PB News