China said on Monday interest rates do not need to rise and the yuan currency will be kept stable for now, underlining authorities' determination to keep the economy on an even keel as they usher in financial reforms. Chinese leaders, gathered in Beijing for the annual session of parliament, also highlighted the risk over investment could resume after a year in which curbs on lending and land use held back breakneck growth in the world's seventh-largest economy.
"An appreciation of the yuan is not favourable for China's economy and would also be unfavourable for global economic development," China's foreign exchange chief, Guo Shuqing, told Reuters on the sidelines of the conference.
This reinforced remarks Guo made over the weekend that suggested no big moves were planned.
Politicians in the United States and Europe have called for flexibility in the yuan, which has a virtual peg to the dollar, and markets have long speculated that a stronger Chinese currency was in the offing.
Officials also said China planned to allow more capital to leave the country and would try to clamp down further on inflows of funds from speculators. Both moves would ease upward pressure on the currency.
"There's no need for now to raise interest rates since the economy is growing at a stable pace and inflation is reasonably low," Guo, head of the State Administration of Foreign Exchange and a deputy central bank governor, told reporters.
But comments from the central bank governor and development chief also showed Beijing was still on guard against a possible rebound in inflation and investment.
Beijing raised interest rates for the first time in nine years in October to slow the racing economy. The one-year lending rate was increased by 0.27 percentage point to 5.58 percent.
High inflation, which had made real lending rates negative, was one reason behind that move. Since then, consumer price inflation has cooled.
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