China reserve ratio hike aimed at inflation-official

TASHKENT, May 3 (BestGrowthStock) – China’s latest hike in the
proportion of deposits that banks must keep in reserve was
intended to manage liquidity and inflation expectations, Vice
Minister of Finance Li Yong said on Monday.

Speaking at a regional finance officials meeting in the
Uzbek capital, Li also reaffirmed China’s stance on the yuan
exchange rate, saying his government wanted to keep the
currency stable but was also continuing with reform of the
“exchange rate formation mechanism.”

Li told the meeting that China would stick to
“appropriately easy” monetary policy, but warned that overly
strong bank lending would lead to upward pressure on inflation
and asset prices.

Li’s comments echoed remarks by Chinese Finance Minister
Xie Xuren at the Tashkent meeting on Sunday.

Xie made it clear that China would stick with its long-held
policy stance of reforming its foreign exchange rate mechanism
despite pressure from the United States to let the currency
rise. [ID:nTOE64100Y]

The People’s Bank of China said on Sunday it was raising
lenders’ reserve requirement ratio by 50 basis points,
effective May 10, its third such increase this year.
[nTOE64100Q]
(Reporting by Zhou Xin and Rie Ishiguro; Writing by Chris
Buckley; Editing by Kim Coghill)
([email protected]; +86-13501014479))

China reserve ratio hike aimed at inflation-official