Central Bank Monetary Policy Committee Member Li Daokui: The Conditions For Raising Interest Rates Are Basically Mature.

Li Daokui, a member of the central bank's monetary policy, told the media recently that the process of China's economic structural adjustment and pformation of development mode will not change because of the European sovereign debt crisis.

China should adhere to a moderately loose monetary policy, continue to control the risk of excessive asset price rise and appropriately raise deposit interest rates. At present, the conditions for raising interest rates are basically mature.

As for how the central bank should manage inflation expectations, Li Daokui said that the price rise this year is very grim, and prices may rise at a relatively fast pace in the second half of this year or even next year.

It is very important to control inflation expectations. We should appropriately manage the scale of bank loans and appropriately raise deposit interest rates.

Higher prices boost inflation expectations

"The conditions for using this tool are basically ripe.

Only by raising interest rates can we tell the vast number of depositors that the deposit interest rate will basically rise at the same time as prices rise, and that savings will be placed in banks, which will not be a problem in the long run.

He said.

China's consumer price index (CPI) rose 2.8% in April, up from the one-year deposit benchmark interest rate for third consecutive months, and price inflation continued to rise to boost inflation expectations.

Li Daokui also said that the current European debt crisis will not affect the pace of economic recovery in Europe, and the market volatility caused by the European sovereign debt crisis has basically ended, which is unlikely to cause the two bottom of the European and global economy.

Real estate control materials continue

For the direction of China's real estate regulation and control policy, Li Daokui said that over the past year, the rapid rise of real estate prices is not a great risk to the health of banks, but the basic consideration of regulating the real estate is the long-term development of real estate.

He said China should continue to control the risk of excessive asset price rise.

"Real estate regulation policy will not change, will continue, until the real estate development mode of a fundamental change."

Li Daokui also believes that the trend of RMB internationalization has been formed, which is very beneficial to China's economy. It is necessary to study how to better allocate funds to China to get higher returns.