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People's Daily Online>>China Business

Economists: China unlikely to cut interest rate in short term

By Ye Xiaonan (People's Daily Overseas Edition)

16:46, December 30, 2011

Edited and translated by People's Daily Online

Wei Jie, a professor of economics and management at Tsinghua University, said China is unlikely to cut interest rate in the short term unless the growth rates of the Consumer Price Index falls below 3 percent.

When a country faces difficulties, it must be cautious about adjusting its monetary policy, Wei said.

Hu Yuyue, an economist, said China is unlikely to further raise interest rate because this will further enlarge the interest rates gap between China and the United States as well as European countries.

At the same time, interest rate cut is unlikely either as the country has been suffering negative interest rates for more than 20 consecutive months.

However, a rate cut is still possible, and it depends on whether domestic inflationary pressure will decline and whether the global economic situation will improve.

Lian Ping, chief economist at the Bank of Communications, noted that it has become unnecessary to raise interest rate, given the drop in the CPI’s growth rates and an economic slowdown.

At the same time, due to mid-to-long term inflationary pressure and steady economic growth, cutting interest rate is also unnecessary. Therefore, the country is likely to keep its interest rate unchanged in the short term.


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