BEIJING, Nov. 17 -- The China shouldn't relax
monetary policy too fast, even amid an economic slowdown, a central bank
official said Sunday.
"Monetary policy shouldn't be loosened too fast
because there is still a risk that inflation will rebound," Jiao Jinpu, vice
president of the People's Bank of China's Graduate School Council, told
reporters at a financial conference in Beijing.
"The lagging effect of China's monetary policy may be
more obvious while all major economies are slowing down."
The central bank has cut benchmark interest rates
three times in two months, scrapped restrictions on how much banks can lend and
shifted from a "tight" to "moderately loose" monetary policy after growth
expanded at the slowest pace in five years in the third quarter, Bloomberg News
"Monetary policies shouldn't be adjusted too
aggressively or it may have negative long-term consequences," said Wu Jinglian,
a senior economist at the State Council Development and Research Center, at the
conference. "Measures to bolster the economy should come more from the
government's fiscal policies."
China's under-developed financial system,
volatilities in money and loan growth and turbulent global financial markets are
factors hindering the effectiveness of the central bank's policy adjustments,
"As the global financial crisis is having an
increasing impact on China's economy and financial system, we must constantly
observe the situation and use a mix of measures flexibly and prudently to
counter risks," said Jiao.
(Source: Shanghai Daily)