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BEIJING: China will not raise interest rates soon amid global market turbulence, but the People's Bank of China could still take tightening steps later, the official China Securities Journal said in a front-page editorial.
"In the short term, China's monetary policy will enter a period of silence, and high inflation may not trigger an immediate rate rise in China," it said on Wednesday, Aug 10.
In contrast to the US Federal Reserve, which has promised to keep interest rates near zero for at least two more years, pressure remains for China's central bank to further raise interest rates, the editorial asserted.
"Real interest rates are still in negative territory, the property control campaign is still ongoing, and the restructuring of the economy must be accelerated. So it's still possible for the central bank to raise interest rates," the paper said.
The China Securities Journal, a paper run by the Xinhua news agency, said managing inflation remains a top priority for Beijing. Annual inflation in China inched up to 6.5% in the year to July, its highest since June 2008.
To tame inflation, China has raised the benchmark interest rates three times and the required reserve ratio six times in 2011, but some economists are arguing that it is time for Beijing to change its policy stance as price pressures ease.
The paper added that Beijing may ask commercial banks to place more deposits with the central bank as reserves if capital inflows are large.
China's Premier Wen Jiabao on Tuesday urged nations to work together to stabilise turbulent financial markets day as global stocks stumbled on fears the world economy is headed for a downturn. — Reuters
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