World Economy

Fed should not raise interest rates just yet: China FinMin

Chinese Finance Minister Lou Jiwei attends the press conference of the National People's Congress on March 6, 2015 in Beijing, China.
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Now is not the right time for the United States to raise interest rates, given the global economic situation, China's Finance Minister Lou Jiwei said in an interview published in the China Business News on Monday.

Speaking on the sidelines of the annual meeting of the World Bank and International Monetary Fund in Lima, Lou said developed economies were to blame for the global economic malaise because their slow recoveries were not creating enough demand.

"The United States isn't at the point of raising interest rates yet and under its global responsibilities it can't raise rates," Lou was quoted as saying.

The finance minister said the United States "should assume global responsibilities" because of the dollar's status as a global currency.

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Lou's comments were published hours after U.S. Federal Reserve Vice Chairman Stanley Fischer said policymakers were likely to raise interest rates this year, but that that was "an expectation, not a commitment".

Asked about the global economic situation, Lou said the problem was not with developing countries.

"Rather, it is the continued weak recovery of developed countries" that's hindering the global economy, he said.

"Developed countries should now have faster recoveries to give developing countries some external demand."

Lou welcomed the structural reforms in Europe as a positive development, but said geopolitics and the Syrian refugee crisis would have an impact on its economy.

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He described the slowdown in China's economy as a healthy process, but said policy makers need to manage it carefully.

"The slowing of China's economic growth is a healthy process, but it is a sensitive period. The Chinese government must make accurate adjustments, keeping the economy within a predictable space while continuing to promote internal structural reforms," he said.

Separately, a senior central banker said that China's stock market correction is "almost over", according to the China Securities Journal.

Yi Gang, deputy governor of the People's Bank of China told an annual meeting of the International Monetary Fund and World Bank in Peru that China's stock market has experienced several rounds of corrections, the newspaper reported on Monday.

The corrections have had limited direct impact on China's economy as Beijing has taken a series of measures to avoid systemic risks, Yi was quoted as saying.