China central bank governor says monetary stance to stay accommodative

HONG KONG  -People’s Bank of China (PBOC) Governor Pan Gongsheng said monetary policy would be kept accommodative, though inflation was “bottoming out” and was likely to pick-up in coming months.

China’s economy gained momentum in recent months, paving the way for achieving the official growth target, Pan told the HKMA-BIS High-Level Conference in Hong Kong on Tuesday. The government has set a growth target of around 5 percent for this year.

“Over the past year or so, many central bankers around the world have been troubled by the problem of persistent high inflation, but for China, the problem is somewhat different,” Pan said.”Now, the CPI is gradually bottoming out in China.”

China’s consumer price inflation is likely to pick up in the coming months as recent drops in food prices, and especially pork prices will not be sustained, Pan said.

Pan also pledged to strengthen global macroeconomic policy dialogues and communication and said China will make it easier for foreign financial institutions to do business in the country.

The central bank is committed to supporting Hong Kong’s role as an international financial center, Pan added.