To raise the reserve ratio or increase the interest rates?

To raise the reserve ratio or increase the interest rates?
Mar 2, 2008 04:03
JIMMYB Points: Join Date: Feb 7, 2007 Status: offline	As the news suggests, China might increase the interest rates in March to curb the inflation and high CPI and ensure the stable and healthy growth of Chinese economy. However, some experts say that interest rates increase can't help China to solve the inflation problem. Why? The whole world is facing inflation. That US Fed continues to cut the interest rates escalates global excess liquidity. Right now, China faces much pressure. To increase interest rates can't help curb inflation from the outside. Then, some other people advise to raise the reserve ratio. What do you think of these two methods, to raise reserve ratio or increase the interest rates?

Mar 2, 2008 04:03

JIMMYB
Points:
Join Date: Feb 7, 2007
Status: offline

As the news suggests, China might increase the interest rates in March to curb the inflation and high CPI and ensure the stable and healthy growth of Chinese economy. However, some experts say that interest rates increase can't help China to solve the inflation problem. Why? The whole world is facing inflation. That US Fed continues to cut the interest rates escalates global excess liquidity. Right now, China faces much pressure. To increase interest rates can't help curb inflation from the outside. Then, some other people advise to raise the reserve ratio. What do you think of these two methods, to raise reserve ratio or increase the interest rates?

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