THE central bank was remaining vigilant on inflation and could raise bank reserve requirements further to counter rapid capital inflows, Governor Zhou Xiaochuan said in comments published yesterday.
Inflation is still higher than many people expected. It may be still going up a little, so we should keep vigilant on that, the Dow Jones Newswires quoted Zhou as saying at the sidelines of a meeting in Kyoto on Sunday.
Zhou was quoted as saying that China s consumer inflation had more room to climb, even though inflation slowed in December.
Zhou also said the central bank could use other monetary policy tools to tackle inflation.
The central bank has raised reserve requirements seven times and interest rates twice since early last year to mop up excess cash in the economy. The government has made a top priority this year to tame inflation.
Zhou reiterated the central bank would maintain a prudent policy to help keep a lid on inflation.
China s December consumer prices ran at an annual pace of 4.6 percent, slowing from November s 28-month high of 5.1 percent, although some analysts expect inflation to accelerate to as high as 6 percent over the course of the first quarter.(SD-Agencies)
