BOAO, China--China's central bank Governor Zhou Xiaochuan warned
on Sunday that continued monetary easing measures taken by other
central banks could make the U.S. dollar "too strong" and cause
capital to flow into the U.S. market.
Mr. Zhou, governor of the People's Bank of China, made the
comments at a high-level economic and political forum in Boao, on
the southern Chinese island of Hainan.
Mr. Zhou's remarks come amid growing worries about capital
flowing out of emerging economies like China even as U.S. Federal
Reserve is expected to raise interest rates later this year.
Central banks in Europe and Japan, on the other hand, have been
relaxing monetary policy, while China also stepped up efforts to
ease policy in recent months.
Also on Sunday, Mr. Zhou said that China has "more room" to ease
monetary policy if inflation continues to fall and the slowdown in
China's growth worsens. He said China will watch closely for signs
of deflation amid falling global commodities prices.
Last week, he said China wouldn't relax monetary policy too
aggressively for fear of undermining ongoing structural
reforms.
In addition, Mr. Zhou said Beijing will press ahead with opening
up its capital account as part of efforts to revamp the country's
financial system.
Write to Lingling Wei at lingling.wei@wsj.com
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