BEIJING (Reuters):
China will tighten policy more aggressively if measures already taken failed to cool the red-hot economy, a central bank official said in remarks published on Monday.
"The central bank will wait and see whether the signs of a slowing trend evident in the June economic indicators continues or not. If not, the central bank will take stronger measures," Liu Lida, head of the monetary policy and theoretical research division of the central bank's research bureau, was quoted as saying by the official China Securities Journal.
China's annual economic growth accelerated to 11.3 per cent in the second quarter from 10.3 per cent in the first quarter.
The central bank raised banks' reserve requirements on Friday for the second time in five weeks. It also raised lending rates in late April and ordered curbs on lending to overheated sectors.
Liu said a stark problem confronting monetary policy was China's large trade surplus and the inflow of international capital, which have boosted the country's foreign exchange reserves to a record US$941.1 billion.
"This is not only causing excessive growth in money supply but is also having an impact on the effectiveness of the central bank's monetary policies," Liu said.
