China’s Vice Finance Minister Li Yong says China’s latest hike in the proportion of deposits that banks must keep in reserve is intended to manage liquidity and inflation expectations. China will stick to “approxiametely easy” monetary policy, but the minister warned that overly strong bank lending would lead to upward pressure on inflation and asset prices.
Regarding the yuan, the official said the government wants to keep the currency stable but is also continuing with reform of the “exchange rate formation mechanism.”
Guess we shouldn’t expect any appreciable revaluation of the yuan anytime soon.
