China central bank says Fed easing ineffective and dangerous


Zhou Xin and Michael Martina
CNBC
January 30, 2011

BEIJING (Reuters) – Quantitative easing by the Federal Reserve and other central banks cannot address fundamental economic problems but may lead to excessive global liquidity and competitive currency depreciation, China’s central bank said on Sunday.

In its monetary policy report for the final quarter of 2010, the People’s Bank of China (PBOC) also confirmed that it would target 16 percent growth of the broad M2 measure of money supply this year, down from the 19.9 pct growth recorded at the end of 2010.

The central bank said the Fed’s monetary easing was pushing up international commodity prices and asset prices in emerging markets, including China.

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