Chinese Central Bank Commits to Normal Monetary Policy on Back of Low Inflation Expectations

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The head of the People’s Bank of China (PBOC) forecasts low inflation in 2021, providing room for the maintenance of stable monetary policy.

PBOC governor Yi Gang said that annual inflation in China was expected to remain below 2% in 2021, despite a surge in commodities prices in the first half of the year.

Yi said that this low inflation level would permit the Chinese central bank to maintain “normal” monetary policy and help shore up the stability of the financial system.

“We must adhere to policy stability as a priority, and stick to implementing normal monetary policy,” said Yi at a financial forum held in Shanghai on Thursday.

“Keeping interest rates at a proper level is conducive to the stable and healthy development of the markets.”

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