China to 'fine tune' monetary policy
By Zhang Lu (China Daily)
Updated: 2006-06-16 09:08
China will adjust its monetary policy in light of data showing continued
excessive credit and investment growth, the central bank chief said
"There will be fine-tuning (measures) and we will strengthen
open market operations," Zhou Xiaochuan, governor of the People's Bank of China,
told reporters at a forum co-hosted by Bank of Communications and its partner
He did not elaborate on specific measures, however.
central bank has already begun draining cash from the financial system by
raising lending rates and selling bills to selected banks.
figures show money supply, loans and investment continued to surge in May,
tightening measures adopted by the central bank have had some effect, said Chen
Jijun, an analyst with CITIC Securities.
"The growth might be higher if
the government had not raised the one-year benchmark lending rate by 27 base
points," he said.
New loans in May were nearly double those of the same
month a year earlier.
"Within the next one or two months, the government
may continue to monitor the results of its previous measures and strengthen the
implementation of these measures, instead of taking further moves very soon,"
Issuing special bills has been one of the major means of
controlling the surge in loans, vice-governor of the central bank Wu
Xiaoling said on Wednesday.
The central bank sold 100 billion yuan
(US$12.5 billion) worth of one-year bills to selected banks, with the yield at
2.1138 per cent, much lower than the 2.4800 per cent in its regular sale of
one-year bills this week.
This measure is expected to have more impact
than a similar move taken a month ago.
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