Price stability top priority, says China’s central bank

September 12th, 2011 - 4:32 pm ICT by IANS  

Beijing, Sep 12 (IANS) The People’s Bank of China (PBOC), the country’s central bank, reiterated Monday that stabilising the overall price levels remained the top priority of macro-economic regulation.

Some factors that drive prices upward have been contained but not eliminated, while inflation remains relatively high, the Chinese central bank said in a statement on its website.

It said the country will continue the prudent monetary policy and keep the growth of credit stable and moderate, reported Xinhua.

The bank’s assurance came after data showed China’s consumer price index, a main gauge of inflation, climbed 6.2 percent year-on-year in August, cooling from a 37-month high of 6.5 percent in July.

According to PBOC statistics, by the end of August, the outstanding of broad money supply (M2), which covers cash in circulation and all deposits, rose 13.5 percent year-on-year to 78.07 trillion yuan ($12.20 trillion), down 1.2 percentage points from July growth and 5.7 percentage growth one year ago.

The slowdown in M2 growth was in line with the country’s prudent monetary policy, and current liquidity conditions remained compatible with the country’s stable and relatively fast economic growth, the central bank said.

PBOC also said it is researching a new “M2+” measure to cover wider money supply metrics as current M2 data had underestimated the total real liquidity due to the introduction of wealth management products.

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