Low rates could discourage financing real economy: China central bank governor

2009-11-20 02:44:45 GMT2009-11-20 10:44:45 (Beijing Time) Xinhua English

BEIJING, Nov. 20 (Xinhua) -- Low interest rates would discourage financial institutions from providing adequate financing to the real economy, Zhou Xiaochuan, governor of the People's Bank of China (PBOC) said Friday.

He told the 2009 Business Week CEO Forum in Beijing that low interest rates, especially the deposit rate, would reduce pressure on financial institutions and thus they would not actively provide financial services to the real economy, he said.

The one-year benchmark deposit rate stands at 2.25 percent among Chinese banks. The rate has been unchanged since December last year when China's central bank cut loan and deposit rates by 0.27 percentage points.

In efforts to stimulate the economy following the global financial crisis, the central bank cut the interest rates five times in four months from September to December last year.

EMAIL | PRINT | RSS

Add Your Comments:

Please read our Terms of Service. Messages that harass, abuse or threaten others; have obscene or otherwise objectionable content; have spam, commercial or advertising content or links may be removed.