China has no timetable for full convertibility of the yuan, People's Bank of China Governor Zhou Xiaochuan said at the Asia Financial Forum in Hong Kong.
Zhou added China will take a step-by-step approach to currency reform as the nation moves to further develop its domestic financial and insurance markets. China "is quite concerned about asset prices," Zhou also said, without elaborating. Inflation in China reached 11-year highs in August, brought by a surge in food prices and continued rapid expansion of the economy. China raised benchmark interest rates by 27 basis points last week, its fifth interest rate hike this year, as the government stepped up efforts to combat rising inflation. While China raised rates, the U.S. Tuesday slashed benchmark rates by a larger-than-expected 50 basis points. Zhou said the rate cut in the U.S. isn't a constraint to China's monetary policy, though he said the chance for arbitrage and carry trades exist as a result of the interest rate gap between the U.S. and China. "China's [interest rate policy] is very much on domestic economic considerations such as domestic CPI, domestic investment, and domestic consumption," Zhou said. However, Zhou said the PBOC will stay on the lookout for further movements of U.S. interest rates. China's consumer price index rose 6.5% in August from a year earlier, the fastest rise since 1996. |
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