He says measures to cool down the economy are still being monitored Interest rates do not need to be raised at the moment because there is not enough evidence the economy is racing out of control, the central bank chief says. Zhou Xiaochuan, the governor of the People's Bank of China, said the bank was still reviewing the effect a series of measures had had on economic indicators such as inflation, money supply and bank lending. 'We still have to monitor the impact of earlier tightening measures', he said on the sidelines of a financial conference in Beijing. Li Yang, a member of the central bank's monetary policy committee, said on Monday that the bank would raise interest rates if the consumer price index, which rose 3.8 per cent year on year last month, reached 5 per cent. 'The CPI hasn't reached that level yet,' Mr Zhou said. He pointed out that the central bank raised the key rates it charged commercial banks in March, adding: 'We still have to assess the impact of that.' His relaxed comments about the economy were echoed by Vice-Premier Huang Ju. The government 'will continue to carry out a stable and healthy monetary policy to prevent inflation and financial risks', the vice-premier said at the conference. Beijing would continue to strengthen its currency and fiscal policies and improve lending to solve the overinvestment situation in several sectors, he said. The comments by the two senior officials poured cold water on the expectation that interest rates would be raised soon as the strongest tool used to cool the economy. First-quarter gross domestic product growth was revised to 9.8 per cent from 9.7 per cent, a pace that most analysts believe is unsustainable. However, senior officials have consistently said they will assess the impact of earlier policies before acting further, a point made by Premier Wen Jiabao during his recent trip to Europe. These measures have included raising the bank reserve ratio, administrative orders to reduce unprofitable bank lending and prohibiting loans for new projects in hot areas such as steel and property. Other economists and bankers at the forum agreed with Beijing's economic policies. 'They should be cautious not to push down the growth rate too much,' said Robert Mundell, a Nobel Prize-winning economist. William Rhodes, chairman of Citibank, said on the sidelines: 'The government is taking measures it needs to take to slow the economy. We think it's doing the right thing.' Meanwhile, Mr Zhou also said he had confidence in the country's banking reform measures. 'With the changes in the external [operation] environment, we are confident that we will do well in the reform of commercial banks,' he said.