China
        

Economy

Exchange rate policy not major tool to tame inflation

Updated: 2011-03-11 13:17

(Xinhua)

Twitter Facebook Myspace Yahoo! Linkedin Mixx

BEIJING - The exchange rate policy is not a major tool for China to tame inflation, central bank governor Zhou Xiaochuan said Friday.

Related readings:
Exchange rate policy not major tool to tame inflation China to further reform exchange rate, interests rate
Exchange rate policy not major tool to tame inflation Yuan strengthens to record high
Exchange rate policy not major tool to tame inflation China sees sharp rise in foreign exchange purchase
Exchange rate policy not major tool to tame inflation Yuan reform pace remains 'unchanged'

Zhou made the comment in response to a question on whether China would make a one-off appreciation of the yuan to ease rising domestic price pressures.

The interest rate policy, however, remains an important tool to curb inflation although higher interest rates might lead to capital inflows, Zhou told a press conference on the sidelines of the ongoing China's parliamentary session.

China will continue to push forward the yuan's exchange rate reform in a self-initiated, controllable and gradual manner and enhance the flexibility of the exchange rate, Zhou said.

The consumer price index (CPI), a major gauge of inflation in China, rose 4.9 percent in February from the same month last year, the same figure as in January, the National Bureau of Statistics (NBS) announced Friday.

"We will use price and quantitative tools such as interest rates, banks' reserve requirements and open market operations to maintain appropriate liquidity in the banking system," said a statement to the media before the press conference.

"China will implement dynamic differentiated reserve requirement ratios to guide stable and moderate growth in money and credit," it said.

Specials

NPC & CPPCC sessions

Lawmakers and political advisers gather in Beijing to discuss major issues.

Labor crunch

Worker scarcity is no longer confined to eastern areas, minister says.

Water & Luck

People spray each other with water to express good wishes in Dongguan, Guangdong province.

All about the Year of the Rabbit
President Hu visits the US
Ancient life