Reading the PBOC Tea Leaves to Decipher Chinese Monetary Policy
Senior officials of Chinas central bank, the Peoples Bank of China (PBOC), have left a trail of curious statements over the past month that appears to tell an interesting tale.
The story starts with an interview PBOC Governor Zhou Xiaochaun gave at the G20 meeting in Paris on February 18, in which he said China would use all mechanisms at its disposal, including bank reserve requirements, interest rates, and the exchange rate, to combat inflation:
Zhou Xiaochuan, the nations central bank governor, said reserve requirements are just one tool to curb price gains in the fastest-growing major economy.
We cant really say that its the only method that well use to battle inflation, its about using all means including rates and currency, he said in a Feb. 18 interview. One method doesnt exclude the other, said Zhou, who was attending a Group of 20 nations summit in Paris.
Another source,
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