MNI BRIEF: PBOC Monitoring Inflation, Keeps Yuan Flexible
The People Bank of China will monitor inflation for signs of strengthening and enhance the flexibility of the yuan exchange rate, officials of the Bank told reporters on Friday in a briefing. Alongside that, the Bank will make efforts to boost domestic consumption and support employment via ample liquidity and lower borrowing cost, officials of the Bank told reporters on Friday in a briefing.
Zou Lan, head of the PBOC's monetary policy department, said China’s Inflation could still rise as money supply remains at a high level, domestic demand is recovering and the impact of imported inflation is lingering, even though the inflation is expected to be tepid in 2023.
Xuan Changneng, vice-governor at the PBOC, said the Bank will increase the flexibility of the yuan which will remain stable even though the trade surplus would narrow this year as major economies slow down. The PBOC will push the reducing cost of companies’ funding and consumption in a bid to bolster domestic demand and support supply-side reform, Xuan pointed out, noting the Bank will control the strength and pace of credit expansion to avoid any liquidity floods.