China should stick to prudent monetary policy
Updated: 2011-08-24 14:22
BEIJING-- China should still stick to a prudent monetary policy, the China Securities Journal quoted a central bank advisor as saying on Wednesday.
Xia Bin, a member of the monetary policy committee of the People's Bank of China, or the central bank, made the remarks at a forum on Tuesday, noting that the country's macro-economic-controlled direction will not change.
"The government is adopting various measures to increase financing to small and medium enterprises, which is the right decision, but the market shouldn't misread it as loosening overall liquidity," Xia said.
Meanwhile, Xia expects the country's consumer prices to fall slightly in the fourth quarter, with the full-year inflation data to stay between 4 percent and 5 percent.
Xia said the moderate rise in the yuan's value can help control imported inflation, but solely relying on the yuan's appreciation to contain inflation is unrealistic.
Under the current economic situation, the government should also continue to accelerate diversifying the allocation of its foreign reserves and the yuan's "go-global" drive, Xia suggested.
The country's consumer price index, a main gauge of inflation, accelerated to a 37-month high of 6.5 percent in July, well above the government's target ceiling of 4 percent.
This year, China has made curbing inflation a top priority and implemented a prudent monetary policy.
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