Inflation Indices

Liquidity injection shows dwindling inflation concerns

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.

Inflation pressures?

Are domestic commentators worried about recent official inflation rates?

China data shows economy still in cooling trend

Official data released on Friday confirms cooling as the dominant trend in the Chinese economy, despite the rise of consumer price inflation above the government's 3% red line in May.

May CPI to exceed 3%

China's consumer price index for May is expected to rise 3.1% from a year earlier, according to a Reuters report today, citing three unnamed people who heard government officials state the figure at an investor conference. The inflation figure, should it be confirmed by the statistics bureau tomorrow, supports our call (CC June 03 Big Call) that May CPI will exceed 3% driven chiefly, in our opinion, by rising food price inflation, which accounts for over 30% of the index. We foresee food CPI to jump to around 6.5%-7.5% in May, up from 5.9% in April.

Food to drive inflation above target

Speculative capital flowing into a range of agricultural products and falling output following a run of bad weather is set to continue driving up food prices.

China April inflation data within expectations

Chinese economic data released on Tuesday showed inflation rising in April in line with forecasts and loan growth somewhat exceeding expectations. We think that, taken alongside cooling trends evident in industrial output and real estate transactions, pressure on Beijing to raise deposit rates are rising while pressures for a hike in lending rates are either neutral or abating.

Is inflation under further pressure from the enduring drought?

Supply shortages have driven up the price of rice by 30% in Chongqing in recent weeks.

China's inflation outstrips bank deposit rate

China's Consumer Price Index (CPI), the key measure of inflation, rose 2.7% year on year in February, accelerating from a 1.5% rise in January and outstripping the benchmark bank deposit rate of 2.25%. The Producer Price Index (PPI), which measures mainly the prices of production inputs, rose 5.4%, compared to a 4.3% rise in January, underlining the structural nature of inflation.

The course of monetary tightening

How far will Beijing go to forestall economic overheating?

China raises bank reserve ratio by 50bps

China's central bank announced it will raise banks' reserve requirement ratio (RRR) by 50 basis points, effective February 25. This is the second 50 basis point hike since mid January, and brings RRR to 16.5% for large depository institutions. There is "temporarily" no change in the RRR for rural credit co-operatives and other "small financial institutions", the People’s Bank of China (PBoC) said.

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