Interest rate policy key factor to tame inflation in China

Interest rate policy key factor to tame inflation in China

348
0
SHARE

Asia Bizz: China has been under the grip of inflation for sometime now, and experts claim that the interest rate policy shall be the key factor to tame this ongoing situation. Central Bank Governor Zhou Xiaochuan stated that the fluctuation foreign exchange rate shall bring out no solution in the country, rather the interest rates look more lucrative.

Zhou was even considering of appreciating the Chinese Yuan in a move to ease out the current economical pressure in the country. The announcement in regards to the interest rates was made during a press conference at a China’s parliamentary session. China has been suffering under the sting of inflation since a couple of years now.

Even the CPI of the country rose to 4.9% last year, triggering the fear of inflation deeper into China. Zhou insisted that China shall push the country’s currency rate further, but in a very controlled and precise manner. He added China will create reserve requirement ratios in a move to acquire stable growth in the country.