Chinese central bank governor Zhou: many tools for policy

BEIJING, Feb. 9 -- Chinese central bank governor Zhou Xiaochuan said Sunday

that the nation doesn't need to rely only on interest rates as a monetary-policy

tool.

"We will choose tools according to our economic situation," Zhou told

Bloomberg News in Kuala Lumpur. "We don't need to use just one tool."

The central bank has yet to cut the key one-year lending rate this year

after five reductions in 2008 that followed the collapse of Lehman Brothers

Holdings Inc in September. Deutsche Bank AG said last week that policy makers

could be less aggressive as lending surged and China's economy showed signs of

bottoming out.

The one-year lending rate is at 5.31 percent, while the equivalent for

deposits stands at 2.25 percent.

China's economy grew 6.8 percent in the fourth quarter from a year earlier,

the slowest pace in seven years, after gaining 9 percent in the previous three

months.

A record 1.2 trillion yuan (US$175 billion) of new loans in January,

reported by China Securities Journal, and two monthly rises in a manufacturing

index, are tentative signs that the economy may revive, some economists say.

(Source: Shanghai Daily)