China's easy monetary policy to remain unchanged: official

11:29, March 07, 2010      

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A 17 percent year-on-year increase in China's broad money supply, and a target of 7.5 trillion yuan (1.1 billion U.S. dollars) for this year, indicated a relatively easy monetary policy, said Su Ning, deputy governor of the People's Bank of China, the country's central bank.

Speaking on the sidelines of the ongoing annual session of the top legislature, the National People's Congress (NPC), Su said the 17 percent increase in the nation's broad money supply was larger than the combined increase of targeted GDP and CPI growth, which suggested an "easy" monetary policy.

"If M2 (the broad measure of money supply) growth is 2 to 3 percentage points higher than the combined growth of GDP and CPI, the monetary policy could be seen as easy," said Su.

Chinese Premier Wen Jiabao said Friday, in the government work report submitted to the NPC, that China targeted an approximate 3 percent rise in consumer prices and 8 percent GDP growth this year.

Su further believed the 17 percent increase in the broad money supply would be able to support the ongoing economic recovery throughout the country.

China's financial institutions lent a record 9.6 trillion yuan in new yuan-denominated loans last year, almost double that of the previous year, to spur the economy amid the global downturn, but it was accompanied by soaring property prices and rising expectations of possible inflation.

Su said the 7.5 trillion yuan in new lending this year should speed up completion of projects under construction, rather than support new projects.

Source: Xinhua
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