China confident inflation will be reined in after rate hike

Steps taken in the past month,including administrative controls to curb speculation and monetary tightening,had started to produce results.

Chinas government will be able to keep inflation in check,Premier Wen Jiabao said on Sunday,a day after the central bank raised interest rates,and he pledged to speed up efforts to rein in house price surges.

Steps taken in the past month,including administrative controls to curb speculation and monetary tightening,had started to produce results,Wen said.

The Peoples Bank of China raised interest rates on Christmas Day for a second time in just over two months as Beijing strengthened its battle against stubbornly high inflation.

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Analysts said the latest rise showed that measures such as increasing banks required reserve requirements to rein in liquidity were not enough on their own,and that the Chinese authorities were determined to keep inflation under control.

We have raised reserve requirement ratio for six consecutive times and increased interest rates twice to absorb excess liquidity in the market to keep it at a reasonable level to support economic development, Wen said in a state radio broadcast a day after the rate rise.

I believe we can keep prices at a reasonable level through our efforts. As a major leader of the government,I have the responsibility and I have the confidence,too, he said in remarks published on http://www.cnr.cn.