• Fri
  • Jul 11, 2014
  • Updated: 4:05pm
NewsChina
MONETARY POLICIES

China monetary tightening pressure eases off

Inflation to slow this month as food prices not rising as fast, says PBOC adviser

PUBLISHED : Sunday, 03 March, 2013, 12:00am
UPDATED : Sunday, 03 March, 2013, 5:35am

Pressure on Beijing to tighten monetary policy and macroeconomic controls is easing as inflation will be "relatively low" this month due to slowing food-price gains, central bank adviser Song Guoqing said yesterday.

Compared with January and February, the pressure "has in my view, been relieved", Song said at a forum in Beijing. "That's good news for growth."

He estimated first-quarter economic expansion would accelerate to 8.3 per cent.

The People's Bank of China has drained cash from the financial system since the Lunar New Year holiday ended on February 15.

This boosted speculation that it was tightening monetary policy amid concerns inflation is accelerating and real estate price gains are excessive.

The State Council on Friday stepped up efforts to cool the property market, raising down-payment requirements and demanding stricter implementation of existing policies.

China's economy expanded 7.9 per cent in the final three months of last year from a year earlier, the first pickup in two years.

Song said he expected first-quarter growth would be higher "mainly because the comparative base in the first quarter of last year is very low".

GDP climbed 8.1 per cent in the first three months of last year from a year earlier, down from 9.7 per cent a year earlier, according to previously released data from the National Bureau of Statistics.

Meanwhile, central bank deputy governor Yi Gang said in Beijing that the mainland was "fully prepared" for a currency war should one happen.

"China is prepared," Yi was quoted as saying by Xinhua.

"In terms of both monetary policies and other mechanisms, China will take into full account the quantitative easing policies implemented by central banks of foreign countries."

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