China's central bank is right to tame high credit growth in the world's second largest economy and not doing so would have long-term negative consequences, a senior official at credit ratings agency Moody's Investors Service told CNBC on Wednesday.
A credit squeeze in Chinese money markets that has fueled worries about the outlook for China's economy has dealt a blow to financial markets this week. On Tuesday, the People's Bank of China (PBOC) aimed to soothe the concerns by saying it would guide rates to reasonable levels.
(Read More: Is China Right to Brush Aside Credit Squeeze?)
"Our take on this is that the PBOC will continue to be vigilant on reining in credit growth," Thomas Byrne, senior vice president at Moody's told CNBC Asia's "The Call."
"This is one of the weaknesses we've identified in recent rating actions and it is very important because if credit growth gets out of control that has negative ramifications for China's economic growth," he added.