BEIJING: The People’s Bank of China (PBoC) stresses the need to monitor the risk of imported inflation, pledging to intensify the forward-looking, flexible and targeted nature of its policies amid rising global uncertainties.
In its first-quarter monetary policy report, the central bank said that effective demand has gradually recovered this year.
It noted improved supply and demand dynamics in the real economy, providing strong support for reasonable prices recovery.
The PBoC acknowledged that the geopolitical events in the Middle East have driven up international crude oil and commodity prices.
This significantly contributed to the pickup in domestic price indicators, and stressed that “the impact of external imported inflation on the domestic economy requires close monitoring”.
In the first quarter, China’s consumer price index rose 0.9% year-on-year, up from zero in the whole year of 2025.
The PBoC also recognised the external challenges from weak global growth, rising supply shocks and uncertainties in global central banks’ monetary policy adjustments.
The central bank said it would calibrate the intensity, pace and timing of policy implementation based on domestic and international economic and financial conditions.
It will also strengthen the coordination of fiscal policy to ensure stable economic growth and a reasonable price recovery.
To promote a steady capital market, the PBoC said it has continued the central bank lending programme that supports share buyback and shareholding increase.
By the end of March, financial institutions had signed contracts worth about 370 billion yuan (US$54bil) for loans used for share buyback and shareholding increase, with over 180 billion yuan already disbursed.
Looking ahead, economists said that the PBoC’s challenge will be balancing its push for a gradual price recovery with the need to shield the economy from renewed external shocks.
With global energy markets volatile and major central banks signalling a longer period of tight policy, Beijing is likely to lean more heavily on targeted liquidity tools and coordinated fiscal support.
This will be to stabilise expectations, safeguard growth momentum and prevent imported inflation from undermining the early signs of domestic demand improvement. — China Daily/ANN
