The People's Bank of China should.......>

CHINA PRESS: The People's Bank of China should combine hikes in the interest

rates of its open market instruments with a targeted required reserve ratio cut

to meet the goal of preventing major financial market risks, the Securities

Times said in a front page commentary Tuesday. Money market rates have a

structural problem -- the spread between money market rates and open market

operation rates remains large, so the PBOC should raise its OMO rates following

the Federal Reserve's expected rate hike this week to smooth the monetary policy

transmission mechanism, the commentary argued. The tightness of liquidity will

get worse under pressure of the regulatory squeezing of interbank transaction

and of rising market rates, so it is necessary to conduct a targeted RRR

reduction to make up the liquidity gap, particularly for small and medium-sized

banks, the commentary proposed. (Securities Times)