China’s Central Bank Reaffirms Monetary, Lending Policies

From Bloomberg:

China’s central bank reaffirmed plans to keep a “moderately loose” stance for 2010 and to restrict credit for industries with excess capacity, in its final monetary policy statement for the year.

“Strict lending controls will be applied to energy- intensive and polluting industries, sectors with excess capacity and new investment projects,” the central bank said in a statement on its Web site.

The world’s third-biggest economy is set to meet the government’s 8 percent growth target for this year after lenders extended 9.2 trillion yuan ($1.3 trillion) of loans in the first 11 months of this year. Besides driving the economic recovery, the extra money in the financial system has increased the risk of asset bubbles and resurgent inflation.

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