BEIJING Feb 15 China is prepared to increase
interest rates and banks' required reserve ratios (RRR) further
in 2011, a government think-tank said in a report published on
China may increase the bank deposit reserve ratio to 23
percent from the current 19.5 percent, according to a report by
the State Information Centre under the National Development and
"The tool of (RRR) will be the first choice for the central
bank," the think-tank concluded in the report that was published
in the China Securities Journal.
As part of China's monetary policy toolbox, the People's Bank
of China is also expected to permit the yuan CNY=CFXS to rise
further, it added.
Other analysts have also suggested that bank reserve
requirements would be the key weapon for China's central bank to
drain money from the Chinese economy. [ID:nTOE70G05B]
China's central bank raised interest rates last Tuesday, the
second time in just over six weeks, intensifying a battle against
stubbornly high inflation in the rapidly expanding economy.
(Reporting by Zhou Xin and Ken Wills)