A report produced by the State Information Center predicts that
China will fulfill the transformation of its tight monetary policy
in 2008. The exchange rate and interest rate policies will play a
big role in this process.??
The report claims that China's 2008 monetary policies will
confront four big challenges: a rocky transmission mechanism;
independence constrained by the international capital flow;
cost-push inflation; shock brought to the micro-control targets by
the rapid development of the fictitious economy. Therefore, experts
predict that price tools such as raising interest rates and
accelerating RMB appreciation will play a leading role in
2008.
?
The report suggests that the Central Bank shall change its current
single interest raising pattern and rearrange its interest raising
methods, levels and timing in line with the country's economic
development. China's monetary policy shall be made according to
internal economic development without being affected by interest
rates spread between the US dollar and the RMB. The Central Bank
will increase the transparency of monetary policies. Additionally,
the monetary policy shall keep in mind the operation of the
fictitious economy and increase its guiding capacity in
restructuring.?
For more details, please read the full story in Chinese. (http://www.cs.com.cn/sylm/04/200712/t20071210_1258075.htm)
(China.org.cn December 10, 2007)
