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Home >> Business
UPDATED: 16:46, June 06, 2006
PBC: no plan to further increase the interest rate
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Zhou Xiaochuan, Governor of the People's Bank of China (PBC), says today that there is no plan to further increase the interest rate at present, because the results of last increase still needs to be observed.

Concerns over possible further interest rate hike are sparkled by the surging domestic investment and bank loans recently.

" It takes time to see the result of the policy which has been taken and we need to be patient. We have not got the data of May and the beginning of June. Therefore, it is hard to say whether the policy has worked."

During the first quarter of this year, China' s GDP increased by 10.2%, and the fixed assets investment rebounded sharply, growing by 27.7% over the same quarter of last year. Bank loans of 1.26 trillion yuan were granted, which has surpassed half of the scheduled amount of the whole year.

The PBC increased the interest rate by 0.27% on April 28.

Some specialists said further interest rate hike will bring more pressure to the appreciation of RMB. The results of recent hike actions are not effective as expected to restrain banks' incentive of lending.

Furthermore, the customer price index (CPI) is still very low in the recent months and there is not much inflation pressure.

Experts believe PBC is likely to consider other measures such as imposing higher deposit reverses to adjust the economy.

By people's Daily Online


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