BEIJING (Reuters) - 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 Tuesday.
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 Reform Commission.
"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 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.
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)
Trending On Reuters
Earthquake Strikes Nepal
A powerful earthquake struck Nepal and sent tremors through northern India on Saturday, killing hundreds of people, toppling a 19th-century tower in the capital Kathmandu and touching off a deadly avalanche on Mount Everest. Full Article
RBI chief Rajan calls for formal financing routes for farmers - report Full Article
India to host Afghan leader, seeks to regain ground lost to China, Pakistan Full Article