Reply #43: China Needs to Curb Liquidity, Bank Governor Says (Update2)

[54anickel]

http://www.bloomberg.com/apps/news?pid=20601089&sid=aeAD6tpIzrF4&refer=china

Sept. 7 (Bloomberg) -- China's central bank governor, Zhou Xiaochuan, said there's too much money in the financial system, a day after banks were ordered to set aside more deposits as reserves for the seventh time this year.

``Liquidity has continued to increase rapidly since the second half of last year,'' Zhou said on the sidelines of an investment forum in southeastern China's Xiamen city today.

The central bank is trying to tame an inflow of cash from record trade surpluses that threatens to stoke inflation and asset bubbles. Consumer prices increased 5.6 percent in July, the fastest pace in a decade, after pork costs soared.

Zhou said he didn't yet know the August inflation rate, due to be released Sept. 11.

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