Current broadcast: Yi Gang's voice is heavy on inflation and monetary policy

People's Bank of China website December 2 day News, President of the People's Bank of China Yi Gang in Thailand center Banking and International Liquidation Under the "Global Change" jointly sponsored by banks center At the seminar, "Bank" said that China's current inflation rate about 2%, especially thanks to the bumper harvest of food and the stability of energy prices.

"China's natural gas and oil prices are basically in line with the international level, coal prices remain stable, and efforts are being made to develop renewable clean energy, which has played an important role in maintaining the basic stability of China's electricity prices." Yi Gang said that China's inflation is expected to remain moderate next year.

(Data map)

Source: People's Bank of China

Total temperature and price increase

"A year or two ago, we were still discussing whether the inflationary pressure was temporary. But since this year, most developed economies have tightened monetary policies in response to high inflation, and many central banks have raised interest rates significantly faster than previous tightening cycles." Yi Gang said.

Yi Gang said that many emerging market economies and low-income countries are facing the pressure of devaluation of their currencies, capital outflows and inflation at the same time. At the same time, data such as housing mortgage interest rates and purchasing managers' indexes in many countries show that the possibility of economic slowdown or recession is rising next year. Central banks need to strike a balance between curbing inflation and maintaining growth.

As for the future trend of CPI and PPI, China's monetary policy implementation report in the third quarter of 2022 pointed out that the overall price increase was moderate, but we should be alert to the pressure of future inflation rebound.

The report said that in the future, China's total economic supply and demand will be generally balanced, monetary policy will remain stable, industrial chain and supply chain will operate smoothly, inflation expectations of residents will be stable, and there will be favorable conditions to maintain a basically stable price level.

The report also suggests that we should attach great importance to the potential of rising inflation in the future. At present, geopolitical conflicts still disturb the world's energy supply. Developed economies have strong stickiness to high inflation, and external imported inflation pressures still exist; For some time, China's M2 growth rate has been at a relatively high level. If the aggregate demand recovers further, it may bring a lag effect; Strong demand for pork procurement and heating in winter, dislocation of the Spring Festival and other factors, especially after more accurate epidemic prevention and control, consumption momentum may be released quickly, or structural inflation pressure may be increased in the short term. We should pay close attention to this, strengthen monitoring, research and judgment, and be alert to future inflation rebound pressure.

Monetary policy should be implemented in a timely manner

In terms of monetary policy, Yi Gang said that due to factors such as the COVID-19 epidemic, China's economic growth was slightly lower than expected, and its GDP grew 3.9% year-on-year in the third quarter. In order to stabilize growth and employment, the prudent monetary policy has been strengthened in time. In terms of total amount, the People's Bank of China recently lowered the reserve ratio by 25 basis points, leading to a decline in market interest rates. At the same time, the People's Bank of China also used structural monetary policy tools to continuously strengthen support for "agriculture, rural areas and farmers", small and micro enterprises, private enterprises and green development.

Yi Gang also said earlier that from the perspective of economic operation effect, China's macro policy strength is relatively appropriate, which not only strongly supports the stability of the overall macroeconomic situation, but also maintains the basic stability of the price situation in the context of high inflation in the world, and also takes into account the internal and external balance.

In the future, monetary policy will continue to exert "credit easing", and structural monetary policy tools are expected to continue to play an important role. Wen Bin, Chief Economist of China Minsheng Bank, believes that the subsequent regulatory authorities will continue to implement the inclusive micro and small loan support tools, carbon emission reduction support tools and special refinancing to support clean and efficient utilization of coal, scientific and technological innovation, inclusive pension, transportation logistics, and equipment upgrading, and strengthen support for key areas, weak links, and industries and market players seriously affected by the epidemic.

In the opinion of Wang Qing, the chief macro analyst of Oriental Jincheng, in order to give consideration to the goal of internal and external balance, monetary policy will be directed through structural tools. At the same time, focusing on increasing infrastructure investment support, the scale of mortgage supplementary loans is expected to increase periodically.

In addition, Yi Gang said that in the future, facing complex and severe situations and challenges, developed economies and emerging market economies need to strengthen cooperation in macroeconomic policies.

label: monetary policy