economics (monetary policy fails to control money supply)

The government can hardly control the inflation,not the money supply. The control of the money supply can be achieved by setting the reserve ratio. High reserve ratio can limit the monetary multiplier and then limit the money supply.

If the government raises the interest rate to, for example 25%, the inflation can also be controlled. But due to worries about the consequence of the too rapid rise in the value of the Renminbi, the government would not raise the interest rate too much at a time.

Chinese government is facing such dilemma.

quite good, thx a lot