Monetary measures pay off

In order to steer credit growth back to normal, the central bank has adopted a range of policy tools including open market operations and increases in the reserve requirement ratio and interests rates. China s monetary policy measures have showed effective results so far, Du Jinfu, deputy governor of the People's Bank of China (PBOC), the central bank, said on Wednesday. But he also stressed the need to develop mechanisms for counter-cyclical control of credit to avoid systematic risks.
The central bank in October raised interest rates by 25 basis points, the first time since 2007, and announced on Nov 19 an increase in commercial bank's required reserves by 50 basis points effective from Nov 29, the second such hike in the month and the fifth increase in 2010.
There is growing market concern that China will further tighten monetary policy if the adopted measures are not effective enough to cool down inflation, which led the nation's benchmark Shanghai Composite Index to fall 5.33 percent in November.