China hints at looser monetary policy
31 March 2008
China's monetary policy will remain tight, but may be adjusted in response to changes in the global economy, Reuters reported, citing comments from a vice governor of the central bank. Yi Gang said the US subprime crisis has not caused China to loosen its monetary policy because fighting rising inflation remains a priority for economic planners. However, he said the central bank would "pay attention" and adjust policy according to the domestic and international situations. Reuters said his remarks indicated that China could loosen its monetary policy this year to offset the negative impact of a global economic slowdown on China's growth. Some bond traders have said that the central bank has already eased its policy, allowing more liquidity to remain in the domestic money market compared to the end of last year.