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    Central Bank of China Pledges Tight Financial Policies

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    NTDTelevision

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    The central bank of China is staying focused on controlling inflation at home. With consumer prices rising to unprecedented levels, the bank is trying to grapple with the runaway bull of inflation.

    The Chinese regime's central bank has posted comments on its website suggesting that it intends to continue with tight fiscal policies aimed at controlling inflation. The People's Bank of China website states that it will "continue to implement prudent monetary policy" and that "stabilizing prices remains a priority."

    A recent jump in consumer pork prices combined with a consumer price index at 6.4% and rising has Chinese leaders looking for an economic fix. The bank intends to continue to use economic handles like interest rates and reserve requirements. But it might not be enough to get prices under control and fend off social unrest.

    The central bank has raised interest rates five times in the last nine months. The reserve ratio—that is, the percentage of money a bank is required to hold in cash in proportion to the amount it is allowed to lend—has been raised nine times over that same period.

    Among the list of policies the central bank has stated it will pursue is a more accurate valuation of the yuan, based on comparison with a "basket of currencies." The yuan has been virtually "pegged" to the dollar for years, and most analysts see little chance of true currency reform.