China central bank head says China can cope with Federal Reserve tapering

September 6
9:07 AM 2013

China Central Bank Chief Zhou Xiaochuan said China would be able to cope with the possible shock that the planned US Federal Reserve tapering of its monetary stimulus would bring. The official Xinhua news agency quoted Xiaochuan, who said, "In the face of a possible shock, China will ensure vitality and resilience of the micro-economy and maintain flexible policies. China has enough counter-measures and has made some preparations from the beginning."

The central bank chief, however, said China would not be immune if sharp volatility was exhibited by financial markets worldwide. Speculation is rife that the US Federal Reserve will begin reducing its bond purchases this month. The next policy meeting is scheduled on September 17 and 18.

Earlier, Chinese Central Bank Deputy Governor Yi Gang urged Asian countries to strengthen their financial ties as the Federal Reserve tapering loomed. Russian President Vladimir Putin also announced that emerging economies would put up a USD 100 billion fund to hold the currency markets stable. However, Reuters reported that the fund would probably not be established in time to head off the effects of the Fed tapering.

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