Adoption of quantitative tools necessary to tackle inflation.

By bne IntelliNews August 31, 2011
China's economy is still under the spell of increasing inflation and adoption of quantitative tools or increasing interest rates are necessary in order to tackle inflation. As reported by Xinhua China Money, Xu Xiaonian, a professor at China Europe International Business School stated that the country is still suffering from rapidly growing inflation owing to excessive money supply in the economy. The country's Consumer Price Index (CPI) increased 6.5% in July this year, leading to a three-year high inflation rate during the same period. Thus, correcting the actual negative interest rate is the only solution to tackle inflation.
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