China's central bank says it has 'tools' to curb inflation: report
Posted: 28 June 2007 1233 hrs

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BEIJING - China's central bank is watching inflation and is prepared to use a range of monetary policy tools to keep prices from rising too fast, state media said Thursday.

"The central bank is firm on keeping inflation under control ... we have many tools at hand," assistant central bank governor Yi Gang was quoted as saying by the China Daily.

China's inflation rate jumped to 3.4 percent in May, topping the benchmark one-year bank deposit rate of 3.06 percent, meaning that people in effect lose money by putting their savings in the bank.

The central bank has already hiked interest rates twice this year and five times required commercial banks to place more money in reserve in an effort to cool inflation, fixed-asset investment and stock market speculation.

But the steps seemingly have done little to rein in the investment boom, raising concerns among officials that the already excessive liquidity troubling the economy would be even harder to contain and eventually lead to an abrupt slowdown in growth. - AFP/ir