A leading International Monetary Fund official today welcomed China's first interest rate hike in nearly three years and said the move should lead to a better balance of the country's economy.
"It was in line with their general policies," IMF deputy managing director John Lipsky told reporters during a visit to Tokyo.
He was speaking a day after Beijing announced that it would raise its benchmark one-year lending and deposit rates by 0.25 percentage points each as it ramps up efforts to contain inflation and soaring property prices.
Lipsky also called China's yuan reform an "ongoing process" and added that "authorities have already announced a policy of increased currency flexibility as part of a broad approach toward rebalancing the economy".
The rate move came after the World bank had called on China to let its yuan currency strengthen, which it said would help fight soaring prices and boost domestic consumption.
Lipsky was in Tokyo for a brief meeting with Japanese Finance Minister Yoshihiko Noda ahead of a weekend meeting in South Korea of finance chiefs from group of 20 leading economies.
Lipsky and Noda mainly discussed Japan's efforts to emerge from two decades of economic malaise, including recent monetary easing by the Bank of Japan.
