MNI BRIEF: PBOC To Keep Liquidity Ample Despite PPI Levels

China's inflation is controllable and the People' Bank of China will keep liquidity ample and stabilize the credit growth with its various monetary policy and structural tools, a high-ranking central bank official told reporters Friday. PPI will remain at a high level in coming months, but it is expected to slow as early as the end of this year or early next, as global supply chains and transportation improves as well as the high base effect, said Sun Guofeng, head of the Bank's monetary policy department, noting consumer prices will edge up but remain in a targeted range.

Interbank liquidity will remain stable this quarter and the PBOC will use its tools, including MLF and OMOs, along with structural tools, to meet liquidity demand, Sun said, noting the PBOC will closely watch factors that impact liquidity demand.

The central bank is preparing to launch new facility to support carbon emission reduction. As a structural policy tool, the facility will provide loans with the low preferential rate to support key projects, Sun said. Sun also said the PBOC was fully prepared to reduce the spillover effects from any future policy adjustment by major overseas economies, including moves by the Fed.