SHANGHAI, January 5, 2009 - A top Chinese central bank official said China has room to further adjust its monetary policy because its interest rates remain higher than those in the United States and Japan, in remarks published Monday.
"Currently, China has ample room to carry out its monetary policy," Yi Gang, a deputy governor of the central bank, said in an article co-written with a university economist and published in the Caijing magazine.
On December 22, the People's Bank of China announced its fifth interest rate cut since September, amid growing signs that the financial crisis was hurting the economy.
In the latest rate cuts, the benchmark one-year lending rate was reduced to to 5.31 percent, while the one-year deposit rate was cut to 2.25 percent.
"Compared with the 0.0-0.25 percent of the US federal funds rates and the 0.1 percent Japan's uncollateralised overnight call rate, we are in a good position to move forward or backward," Yi said.
China's economy, the fourth-largest in the world, is expected to grow by eight percent in 2009, while the consumer inflation rate will be less than three percent this year, he wrote.
Eight percent growth this year would be the lowest level since 1999. The World Bank has predicted 7.5 percent growth this year, a level not seen in 19 years.