Thursday, January 12, 2012

Inflation & Monetary Policy in China

China’s CPI inflation rate edged down from 4.2% y/y in November to 4.1% in December. China’s PPI fell to 1.7% in December, the lowest since December 2009. That should set the stage for the People’s Bank of China (PBoC) to continue to lower bank reserve requirements, as it did on November 30 of last year (effective December 5). That was the first cut since December 2008. More cuts are likely to come as Chinese authorities scramble to offset weaker global economic activity with more domestic growth. (More for subscribers.)

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