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China to Maintain Stable Exchange Rate
China should continue to maintain a stable interest and exchange rate of the local currency Renminbi, according to sources from the Autumn meeting of the Monetary Policy Committee of the People's Bank of China, the nation's central bank.
The meeting analyzed China's economic and financial situation and the implementation of monetary policies over the first three quarters, confirming that the economic growth is stable and prudent monetary policies continue to play a significant role.
By the end of September, the outstanding broad money (M2) was 15.2 trillion yuan, up 13.6 percent, while outstanding loans stood at 10.9 trillion yuan, up 13.5 percent from the beginning of the year. The meeting held that the present monetary and credit supply is in line with the needs of economic development.
The impact of the September 11 accident in the United States on China's economy and finance was also discussed with a caution that attention should be paid to the negative effect the terrorist attacks in the United States could have on China's economic development.
The meeting studied the monetary policies to be adopted in the fourth quarter, and the participants all agreed that there is no serious inflation at present. The fourth quarter monetary policies should continue to keep to the stable and prudent principle, carry out the policy of expanding domestic demand, using various monetary policy tools in a flexible way, maintain an appropriate growth of money supply and continue to support the pro- active fiscal policy, so as to prevent further slowing of the economy.
The meeting predicted that over the whole year the growth of broad money will be 13 to 14 percent, various loans will increase some 1.3 trillion yuan, and the total volume of money and credit supply is expected to reach the target set at the beginning of the year.
The meeting held that it is necessary to continue to maintain a stable interest rate, pay close attention to changes in both domestic and overseas economic and financial situations and coordinate interest rate policies accordingly. The exchange rate mechanism should be further improved on the basis of a stable exchange rate for RMB.
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