The central bank to be cautious in interest rate adjustment: official

10:32, May 14, 2010      

Email | Print | Subscribe | Comments | Forum 

The central bank will be conscious on interest rate adjustment, said Li De, an official with the People's Bank of China, the country's central bank. In addition, the central bank will continue supporting small and medium-sized enterprises' (SMEs) financing demand through bill discounting.

Several economies including Australia, Brazil and India are exiting their loose monetary policies. However, the Greek debt crisis and the Europe's 750 billion euro bailout package will greatly increase the difficulties in the exit of stimulus policies world wide.

Li noted that the growth rates of China's M1 (narrow measure of money supply) and M2 (broad money supply) are slowing down, and the CPI and PPI are rising. "The central bank should properly manage the relationship between the stable economic growth, economic restructuring and the management of inflation expectations."

As to the problem of the SMEs' financing difficulties, Li said that loans to SMEs still account for a relatively small proportion despite the rapid credit expansion. By the end of 2009, China's major banking institutions' outstanding loans to SMEs were 14.4 trillion yuan (around 2.11 trillion U.S. dollars), up 30.1 percent year on year.

Currently, interest rate margin is still Chinese banks' major profit source, which will be lower and lower with the promotion of marketization of interest rate.

"The expansion of services to SMEs will help to adjust banks' profit structure," Li said.

By People's Daily Online


  • Do you have anything to say?


Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • On Sept. 26, a resident passes by a flower terrace decorated for the coming National Day. (Xinhua/Hang Xingwei)
  • The photo, taken on Sept. 26, shows the SWAT team ready for the joint exercise. (Xinhua/Wangkai)
  • Two metro trains in Shanghai collided Tuesday afternoon, and an identified number of passengers were injured in the accident, the Shanghai-based reported. Equipment failures were believed to have caused the crash on the Line 10 subway, Xinhua quoted local subway operator as saying.
  • An employee at a gold store in Yiwu, located in east China's Zhejiang province, shows gold jewelry on Monday.(Xinhua/Zhang Jiancheng)
  • Tourists ride camels near China's largest desert lake Hongjiannao in Yulin, north China's Shaanx Province, Sept. 24, 2011. Hongjiannao is shrinking as a result of climate change and human activities, and may vanish in a few decades. Its lake area, which measured more than 6,700 hectares in 1996, has shrunk to 4,180 hectares. Its water level is declining by 20-30 centimeters annually and its water PH value has risen to 9.0-9.42 from 7.4-7.8. (Xinhua/Liu Yu)
  • Actors perform royal dance at the Gyeongbok Palace in Seoul, Sept. 27, 2011. A ceremony commemorating the 38th South Korea Sightseeing Day was held in Gyeongbok Palace on Tuesday. (Xinhua/He Lulu)
Hot Forum Discussion