Economy

China to keep stabilizing consumer prices as top priority

(Xinhua)
Updated: 2011-05-04 06:52

BEIJING - China will continue to put stabilizing consumer prices and managing inflation expectation as the top priority for macro regulation, the People's Bank of China (PBOC), the central bank, said Tuesday.

It is imperative to keep necessary intensity of the macro-regulation in a bid to consolidate and improve achievements from earlier efforts and boost the sound trend of economic development, said PBOC in its quarterly monetary policy report posted on its website.

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The central bank pledged to properly handle the relationship between controlling money supplies and improving structures, and to remove inflation's monetary conditions while meeting various financing demands.

The report also noted the imported inflationary pressure further intensified with continuous rise of major commodity prices and expectations of global inflation.

To keep rising price in check, the central bank said that it will continue to strengthen liquidity management and make good use of various price and quantitative tools, such as open market operations, bank reserve requirement ratios and interest rates based upon market developments.

It will also steadily push forward market-based interest rate reforms and the reform of the yuan's exchange rate formation system.

The nation's consumer price index (CPI), a main gauge of inflation, rose 5 percent in the first quarter of this year, with the March CPI reaching 5.4 percent. This makes for the fastest CPI gains in more than two years.

Experts and officials have expected the country's first-half CPI would exceed 5 percent and that the second-quarter figure would be even higher due to carryover effects.

To mop up excess liquidity and curb inflation, the central bank has raised commercial banks's reserve requirement ratios four times and hiked benchmark interest rates twice since the beginning of this year.