China’s central bank said on July 28 it will maintain prudent monetary policy in the second half of this year despite inflation concerns triggered by recent rise in the price of pork, the nation’s staple meat.
The People’s Bank of China (PBOC) said in an online statement that it will keep the policy orientation and flexibility of multiple monetary tools to ensure that liquidity stays at an appropriate level.
The statement came after rising concerns that policymakers may tighten the monetary policy as inflation has shown signs of warming due to an unexpectedly sharp increase in pork prices.
Pork accounts for 2.9 percent of the consumer price index (CPI). The price has risen more than 20 percent since March. CPI rose only 1.3 percent in H1.
Dismissing the concerns, the PBOC said the consumer price has steadied at low level and maintained stable outlook albeit prices of very few commodities rose.
The central bank said it will continue to improve lending structure, lower financing costs, keep the yuan stable, stabilize financial market expectations and boost the real economy.
In addition, the PBOC said a meeting for presidents of its branches will be held at the beginning of August to map out major tasks in the second half of this year.