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MNI BRIEF: China CPI To Edge Higher In H2 : PBOC Yi

MNI (Singapore)
(MNI) Beijing

China's consumer price index is expected to rise in H2 and the People's Bank of China will continue pushing funding costs for the real economy lower whilst keeping the yuan exchange rate stable, governor Yi Gang said on Friday.

According to a statement on the PBOC’s website, Yi said China CPI will rise above 1% y/y through December and the economy will see a fast expansion in Q2, helped by base effects. He attributed the recent month-on-month declines of both CPI and PPI to a time lag between post-reopening supply and demand recovery as production has accelerated with policy support while consumption has lagged. High base effects are also weighing on oil and vegetable prices.

The PBOC will continue to “strengthen counter-cyclical moves, fully support the real economy, promote employment” and “ensure a steady reduction in the financing costs of the real economy, and maintain the basic stability of the yuan exchange rate at a reasonable and balanced level” via monetary policy tools, the governor said, noting the central bank will continue to optimize policy to help facilitate the yuan’s cross-border use in trade and investment.


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