China should cut RRR, widen yuan band in 2013: report quotes think tank
Chinese leaders have promised to maintain a prudent monetary policy and pro- active fiscal policy in 2013, leaving room for manoeuvre in the face of global economic risks while deepening reforms to support long-term growth.
"We should keep appropriate base money growth through various measures, cut RRR at the proper time based on changes in monetary conditions," the China Securities Journal quoted Li Wei, head of the Development Research Centre (DRC), as saying.
Li is a top government adviser and it is unclear if his views will be heeded by policymakers. The People's Bank of China, the central bank, cut interest rates twice between June and July and lowered banks' reserve requirement ratios (RRR) three times after late 2011 to free up more funds for bank lending.
But it has refrained from cutting rates or RRRs since, opting instead to inject short-term cash via open market operations into money markets to avoid fanning inflation and property risks.
Li also said that China's renminbi currency should be allowed to move in a wider range while its real effective exchange rate should remain relatively stable. In April China doubled the size of the yuan's daily trading band against the dollar to 1 percent to let the market play a bigger role in setting the yuan's