This is the first time a major economic official of the central government commented on the issue since September, when the United States cut interest rates to reduce the economic impact of the terrorist attacks. The US move prompted a similar wave of cuts worldwide.

Supporters of a Renminbi rate cut said it is necessary so that firms will continue to invest and consumers will continue to shop.

China's economic growth slid from 8.1 percent during the first quarter to 7.6 percent during the January-September period and needs a shot in the arm to stay healthy.

The supporters' voices grew louder when the US rate cut drove the US interest rate to below that of the Renminbi in October. They said the Renminbi's higher rates would pressure its value to appreciate and would put Chinese exporters at a disadvantage.

The US dollar one-year time deposit rate at Chinese banks now stands at 1.25 percent, while the rate for the yuan is 2.25 percent.

But Governor Dai Xianglong apparently did not buy this argument.

He said Monday that the interest rate policies on local and foreign currencies are not linked.

"Our interest rates for foreign currencies follow those at the international markets, but the interest changes of Renminbi are decided according to our needs in macroeconomic adjustment and control," he said, signaling that policy-makers do not believe interest rates would be the right weapon to wield at this moment.

Their answer to the economic slowdown is the continuation of government spending on infrastructure and measures to increase the income of the people, which was made clear during a recent economic working conference of the central government.

Economists in favor of the government's decision said the real problem for investors is the lack of profitable projects rather than the cost of borrowing money.

With the social security network still needing building up and income growth still slow, consumers will be wary even if the yields they get from banking deposits become less, they said.