Economy

China may need rate hike if asset prices rise - ADB

(Agencies)
Updated: 2010-05-20 15:14

TOKYO - China has taken appropriate steps to tighten its monetary policy but it may need to raise interest rates if the country's real estate market continues to show signs of overheating, the Asian Development Bank's head said on Thursday.

ADB President Haruhiko Kuroda told a seminar in Tokyo that China and India should contain inflationary pressure to achieve sustainable growth.

"If the current trend continues in the real estate sector (in China), the central bank would have to further tighten its monetary policy even through raising its policy interest rates," said the head of the Manila-based organisation.

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Consumer prices have not risen sharply in China in recent months, but asset prices, especially for real estate, show some signs of overheating, Kuroda said.

The ADB said in April that developing Asia, a diverse group of 45 economies including Azerbaijan, China, India, Papua New Guinea and Singapore, was set to grow 7.5 percent in 2010 and 7.3 percent in 2011, picking up from 5.2 percent in 2009.