China Has Scope to Raise Interest Rates, Zhou Says

From Bloomberg:

China’s central bank chief said there’s still room to raise after six increases last year, as he tries to tame the highest since 1996.

“The anti-inflation policy is a combination of both quantitative measures and price measures,” Zhou Xiaochuan said in an interview with Bloomberg News in Washington yesterday. “There’s room for using interest rates further.”

China has allowed faster gains by the yuan and pushed bank reserve requirements to a record high to tackle inflation that jumped to 8.7 percent in February on food and fuel costs. Higher rates may slow the economy that contributed the most to global growth last year, just as the Group of Seven nations says the world outlook has weakened.

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