Economy

China is 'doing right thing' to curb inflation: Jim Rogers

(Xinhua)
Updated: 2010-12-08 14:11

NEW YORK - Financial expert Jim Rogers said on Tuesday that China's central bank was doing the right thing by raising interest rate to curb inflation in China right now.

"As we may all know that China is facing serious inflation problems. However, the central bank of China is doing the right thing to curb the inflation by raising interest rate and commercial banks' required reserve ratio," Jim, chairman of Rogers Holdings, told Xinhua News Agency?at a?news conference held by Thomson Reuters.

Regarding the cause of inflation in China, Jim said he did not know much detail about it but believed it had something to do with the excessive liquidity in the market.

"The massive money coming both domestically and abroad caused the excessive liquidity in the market and pushed up prices," he said.

He also criticized the new round of US quantitative easing policy, saying it was "totally wrong" that the Federal Reserve tried to stimulate the US economy by pumping a large amount of money into the market.

"Printing money only makes things worse, not better," he said.

He also held that the Fed's quantitative easing policy aggravated the inflation problem in China.

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"The expectation that China may further raise its interest rate and the widening interest spread between China and the United States will attract 'hot money' flow into China's stock market or commodity market, which also partly caused China's inflation," he said.

Nevertheless, Jim still expressed confidence in China's economy and its currency.

"I own US dollar, yen, Australian dollar, Canadian dollar, and RMB. I am not sure about other currencies, but I am sure about the RMB, which is a strong currency, maybe the safest currency right now."