Interest rate increases decided by economic development

The People's Bank of China (PBC) recently issued statistical data on finance for the third quarter. The data shows that the supply of money, lending and credit has decreased, which demonstrates the effectiveness of comprehensive controls.

People are now concerned as to whether the PBC will adopt any restrictive measures, such increasing interest rates.

Responding to this concern, Wu Xiaoling, Deputy Governor of the PBC said, "Whether or not to increase interest rates is decided by economic development. Comprehensive controls have had the desired affect. In these circumstances, each of our policies will remain stable."

Some financial experts believe the PBC will not raise interest rates in the near future. The PBC has been closely monitoring the economy and inflation. Capital asset investment accelerated the economy earlier in the year; in July, it began to slow. The data from August shows that this situation is unchanged. The inflation rate is rather low, approximately 1.3 percent. The international oil price has decreased by 20 percent, which has reduced the pressure of inflation.

However, Wu Xiaoling thinks that the potential pressure of inflation must not be ignored.

"In fact, China's resources are in short supply. The price does not accurately reflect the availability. Therefore the impact of the price of resources on inflation cannot be underestimated," said Wu.

By People's Daily Online