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Liquidity injection shows dwindling inflation concerns

  • Published 16 Jul 2010

The People's Bank of China (PBoC), the central bank, injected Rmb 49bn through open market operations in the past week, down from Rmb 105bn injected in the previous week, bringing total injections during the last eight weeks to Rmb 937bn.

Although the size of injections declined, the PBoC's continued liquidity-boosting actions display a level of comfort over dwindling inflationary pressures. We reaffirm our repeated calls that inflation remains under control and pressure on the PBoC to raise lending rates is neutral or abating (CC May 11 Alert).

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