Central Bank: 2007 broad money supply target at 16 percent

SteelOrbis Shanghai Following the People's Bank of China (PBOC) Central Financial Work Conference which ended on January 21, a growth target of 16 percent has been set for broad money supply (M2) in China in 2007, based on estimations of eight percent GDP growth and of a CPI increase of less than three percent for the year. In 2006, the actual growth in China's broad money supply (M2) was 16.9 percent i.e., 1.9 percentage points higher than projected. Experts indicate that the targeted 16 percent for this year represents the Central Bank's general acceptance of the current situation. Except for some deflation policies for the control of excessive liquidity (such as a slight deposit reserve rate increase), the possibility of an announcement of a serious tightening in policy is slight.