China may use foreign currency reserve to attract short term speculative inflows

CHINA SECURITIES reported that Zhou Xiaochuan, governor of the People's Bank of China, stated that China can use foreign currency reserve to attract short term speculative inflows into China. Financial Times sponsored by China's central bank published a commentator's article Thursday that if RMB exchange rate is fluctuating widely, it will cause a notable impact on China’s economic and financial stability. Therefore, it is of great significance to keep RMB exchange rate basically stable at a appropriate and balanced level. CHINA SECURITIES reported that China’s primary task of monetary policy for 2011 is to maintain steady growth, and to use more quantitative-based tools to control liquidity growth, meanwhile be wary of increase in interest rate and RMB appreciation. The Melbourne Institute (MI) Survey of Consumer Inflationary Expectations for December shows the median expected inflation rate decreased to 2.8 per cent in December, from 3.1 per cent in November. Spot gold is USD1381.80 Per Ounce, increased USD2.40 from the close in New York market. January crude oil futures fell 15 cents on the New York Mercantile Exchange, to USD88.47 per barrel.

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