US Fed should not raise interest rates just yet, says China's Finance Minister

China's Finance Minister Lou Jiwei at a G-20 governors' press conference at the IMF/World Bank annual meetings in Lima, Peru, on Oct 9, 2015.
China's Finance Minister Lou Jiwei at a G-20 governors' press conference at the IMF/World Bank annual meetings in Lima, Peru, on Oct 9, 2015. PHOTO: AFP

SHANGHAI (REUTERS) - Now is not the right time for the US to raise interest rates, given the global economic situation, China's Finance Minister Lou Jiwei said. 

Speaking on the sidelines of the annual meeting of the World Bank and International Monetary Fund in Lima, Mr Lou said developed economies are to blame for the global economic malaise because their slow recoveries are 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," he was quoted as saying in an interview published in the China Business News on Monday (Oct 12).

He said the US "should assume global responsibilities" because of the US dollar's status as a global currency.

The Finance Minister's comments were published hours after US 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, Mr Lou said the problem was not with developing countries.

"Rather, it is the continued weak recovery of developed countries" that is hindering the global economy, he said. "Developed countries should now have faster recoveries to give developing countries some external demand."

He 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.

He described the slowdown in China's economy as a healthy process, but said policymakers 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.