China Central Bank to aid stability

With Asia firmly feeling the cold after the age old joke, ‘once America sneezes, the world catches a cold‘, the Central Bank of China has made provisions in order to help regulate and maintain the stability of the world economy.

The best form of action is seen as collaboration and, as a result, the People’s Bank of China will focus on continuing to build relationships and co-operate with other central banks and other financial organisations so as to continue to maintain liquidity in the money markets.

The bank of China has also responded to the crisis by cutting interest rates last week, This move was made at the same time as 6 other central banks which went a long way to lifting the doom and gloom.

China has a huge financial interest in the US system as they have invested heavy currency to the tune of $519 billion of Treasury bills and $1.9 trillion of currency reserves.

China’s premier Wen Jiabao said that the impact of the current global financial crisis on China thus far is limited and can be controlled form the inside, since the country is naturally conservative and is adopting carefully managed macroeconomic policies to maintain economic growth.

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