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Zhou Xiaochuan Wrote That Inflation Expectations Are Strong Enough To Maintain Necessary Regulation.

2011/7/12 11:32:00 47

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Zhou Xiaochuan, governor of the people's Bank of China, wrote recently that the most prominent problem in the current macroeconomic operation in China is

Inflationary pressure

It is still relatively large and inflation expectations are still strong. We should further implement sound monetary policy, actively and steadily handle the relationship between maintaining stable and rapid economic development, adjusting the economic structure and managing inflation expectations, making greater use of market-based tools and means, maintaining the necessary regulation and control efforts, effectively controlling the total liquidity gate, maintaining a reasonable scale of social financing, and avoiding major fluctuations in economic growth.

Zhou Xiaochuan pointed out that we should optimize the target system of monetary policy, pay more attention to it and maintain it.

General price level

The objective of stability is to focus on price stability in a broader sense.

He pointed out that the basic characteristics and structural contradictions of China's macro-economic operation are difficult to fundamentally change in the short term. In the future, other goals of macro regulation and control need to be taken into consideration reasonably. In particular, monetary policy should be strengthened to promote the pformation of the mode of economic development and the strategic adjustment of economic structure.

Zhou Xiaochuan stressed the need to build a framework of macro financial Prudential Management System against cyclical and effectively prevent systemic financial risks.

We should take the dynamic adjustment measures of differential reserve as an important measure to prevent systemic financial risks, and establish and improve the elastic mechanism with positive incentives to promote stable and moderate growth of credit.

He said that we should improve the pmission mechanism and environment of monetary policy, select financial institutions with hard constraints, and promote the marketization of interest rates step by step in a planned and step way through gradually liberating the prices of alternative financial products.

We should strengthen the construction of the benchmark interest rate system in financial markets and improve the benchmarking of interbank offered rate (Shibor) in Shanghai.

In addition, we should promote the balance of payments and tend to be basically balanced.

monetary policy

Autonomy and effectiveness.

We should further improve the RMB exchange rate formation mechanism, enhance exchange rate flexibility, maintain the basic stability of the RMB exchange rate at a reasonable and balanced level, expand foreign investment channels in an orderly way, gradually achieve capital account convertibility, steadily promote the use of RMB for cross-border trade and investment, broaden the channels for RMB outflow and reflux, and promote the steady development of RMB offshore financial market.