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ADB chief says China's latest move to rein in liquidity appropriate

(Xinhua)
Updated: 2010-01-14 14:14
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Asian Development Bank (ADB) President Haruhiko Kuroda said Thursday China's move to raise the bank reserve requirement this week will help cool down the overheating real estate sector but will not undermine the country's strong recovery.

The Chinese central bank announced late Tuesday that it is going to raise the deposit reserve requirement ratio by 0.5 percentage points from January 18, the first increase since June of 2008.

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Kuroda said the move is not so much of tightening but it is an adjustment of the extremely expansionary monetary policies towards a more neutral and less expansionary stand.

"It appears quite appropriate," Kuroda said, adding that the inflationary pressure at present is not so prominent but in some cities real estate prices have risen very sharply.

Kuroda said he does not think that the move would affect China's rapid rebound. He said China's economic growth is set to reach the government's target of 8 percent in 2009 and is forecast to reach 9 percent this year.
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