Home>News Center>China
       
 

Governor: Bank rates should keep pace with price
(Chinadaily.com.cn)
Updated: 2004-06-08 13:16

Bank interest rates should keep pace with price changes so as to avoid occurrence of negative rates, China's central bank governor Zhou Xiaochuan said.

"We need to pay full attention to the marcoeconomic condition, especailly price changes," said Zhou, governor of the People's Bank of China, the country's central bank.

According to a Securities Times report, Zhou made these remarks recently when he was in Jinan of east China's Shandong Province, Chengdu of southwest China's Sichuan Province and Nanjing of east China's Jiangsu Province. 

Interest rates adjustment should be able to keep pace with price changes, otherwise, negative interest rate may emerge and people's consumption behaviour and pattern may change. Analysts say Zhou's remarks could be interpreted as a prelude to an interest rate change by the central bank.

Zhou said, under the central government's macroeconomic control policy, the central bank would monitor and analyze the price level carefully, since the relationship of price levels and interest rates can affect people's microeconomic behaviours, consequently alter the macroeconomic condition.

If the adjustment of interest rates lags behind price changes, it may lead to accumulation of raw materials by enterprises, worsening the raw material shortage, and on the other hand, negative interest rates may emerge and cause changes in people's comsumption patterns.

Zhou said the People's Bank of China would be proactive in observing the macroeconomic conditions, and strengthen its monitoring and analysis about investment, consumption, savings and balance of payments, so as to make timely and accurate feedbacks about the effects of macroeconomic measures and to better serve macro control and financial reforms.

On structural problems in specific regions and industries, Zhou said, typical central bank policies like interest rates, deposit reserve funds and exchange rates are mainly for the overall adjustment, but not for specific regions or industries.

 
  Today's Top News     Top China News
 

Eye on economy: Ample room for fiscal manoeuvring

 

   
 

Summer grain output to rise after years

 

   
 

7 million commit to honesty in college exam

 

   
 

DPRK to increase nuke deterrent

 

   
 

Al Qaeda warns of attacks on western airlines

 

   
 

Minister urges assent to market status

 

   
  Great Wall's protection not so great
   
  Expert's doubts on Chen shooting saga
   
  Governor: Bank rates should keep pace with price
   
  President leaves for four-nation tour
   
  Minister urges assent to market status
   
  Eye on economy: Ample room for fiscal manoeuvring
   
 
  Go to Another Section  
 
 
  Story Tools  
   
  Related Stories  
   
Authorities to monitor price shifts before rate decision
   
China may raise rates if inflation exceeds 5%
   
Experts: China may raise interest rates
   
Interest rate rise depends on economic trend
   
Monetary growth may push up interest rate
  News Talk  
  When will china have direct elections?  
Advertisement