After weekend data showed inflation in China in February at 3.2% after 2% in January an article in the Wall Street Journal has PBOC Governor Zhou Xiaochuan saying the bank must guard against inflation, but also conceding the late new year holiday may have had a distorting effect:
China’s lower target for money-supply growth this year demonstrates the leadership’s emphasis on price stability, he said, and shows that policy is “inclined toward tightening.”
There are signs growth in the economy are not as robust as thought, and the February rise in inflation reduces scope for PBOC accommodation. More grist for the mill, especially for AUD traders. (And as a reminder, Australian labour force data is released today at 1130 local time, 0030GMT – what to watch and AUD levels).
PBOC on Inflation Lookout (gated; a news search may turn something up).
