China ready for currency war, central bank official says

Beijing - A top central banking official announced that China is "fully prepared for a looming currency war," state media reported on Saturday.

The conflict could be avoided if major countries observe the consensus reached at a recent G20 meeting to focus monetary policy primarily on the domestic economy, Yi Gang, deputy governor of the People’s Bank of China, was quoted as saying by Xinhua news agency.

G20 members "had shown no signs of scaling back monetary easing that has injected a flood of cash into global markets," the report said, highlighting a 2o-per-cent devaluation of the yen against the US dollar under Japanese Prime Minister Shinzo Abe.

"China is fully prepared," Yi told Xinhua. "In terms of both monetary policies and other mechanism arrangements, China will take into full account the quantitative easing policies implemented by central banks of foreign countries."

Chinese manufacturing grew at its weakest rate in five months in February according to data released by the National Bureau of Statistics and the China Federation of Logistics and Purchasing on Friday.

The Purchasing Managers’ Index in the manufacturing sector fell to 50.10 in February from 50.40 the previous month, indicating recovery had slumped to its slowest rate since September.//DPA