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Should monetary policy be tightened?

  • Published 28 May 2009

A surge in lending has aroused concerns over the risk of future inflation and mounting bad debt.

Shanghai Securities recently reported that loan growth in May will likely hit April's levels of around Rmb 600bn ($87.9bn, €62.9bn, £54.9bn), citing a number of high-profile economists. The news has raised concerns that lending levels are still too high and risk future inflation and a build up of non-performing loans (NPLs), and conclude, therefore, that monetary policy should be tightened.

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