Taming inflation high on central bank's agenda

Updated: 2011-01-07 09:41
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BEIJING -- The People's Bank of China (PBOC), or the central bank, reiterated Thursday that it would give higher priority to stabilizing prices this year.

The central bank plans to make its micro-control policies more targeted and effectively manage liquidity to bring the monetary conditions for price hikes under control, said the PBOC in a statement posted on its website.

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It also stressed that it would employ multiple financial tools, including interest rates, the required reserve ratio, and open market operations, to maintain liquidity within the nation's banking system at a proper level, according to the statement.

Further, the central bank vowed to implement a prudent monetary policy and steer credit growth back to normal.

China faces mounting inflation pressures with the November consumer price index (CPI) renewing a 28-month high of 5.1 percent, while new loans reached 7.45 trillion yuan in the first 11 months of this year, compared to the government's full-year target of 7.5 trillion yuan.

Also, the central bank announced, for the second time in 2010, a hike in interest rates late December. It had also increased the bank reserve required ratio six times last year to 18.5 percent and 19 percent for some large commercial banks, to battle surging prices.