China to raise supply of money to boost economy

China said it plans to increase its money supply 17% in 2009 and encourage lending to boost domestic consumption and buoy growth in the world’s fourth-largest economy, the State Council said in a statement on its Web site on Saturday.



Policy at the moment is generally being focused on boosting liquidity in the banking sector and making sure that is lent to fund investment in infrastructure projects, said Glenn Maguire, chief Asia-Pacific economist at Societe Generale SA in Hong Kongon Sunday, according to the Bloomberg’s report.



There are mounting signs that China's economic slowdown is sharper and deeper than expected. Exports fell in November for the first time in seven years and the industry minister warned Friday that worse was to come.



China will increase its money supply by 17% next year, the Cabinet said in a statement on its Web site. It said that would be 3% to 4% points above the total growth of economic output and consumer prices.



The Cabinet also decided to increase by 100 billion yuan ($14.6 billion) the amount of loans for the country's policy banks this year and suspend and reduce the sale of some central bank securities, the statement said.

 

(Source:en.sxcoal.com)