(Corrects abbreviation of bank in headline.)
Brian Jackson, an emerging-markets strategist at Royal Bank of Canada in Hong Kong, commented on the Chinese central bank’s decision to raise the reserve ratio requirement for lenders for the second time this year.
Jackson made comments by e-mail.
“Beijing was relatively slow to start normalizing monetary policy over 2010 and this contributed to the recent acceleration in headline inflation. But policy-makers have definitely picked up the pace in the last few months, and today’s move is the latest sign of this increased sense of urgency.
“We still think there is more to come in the months ahead, including additional increases in policy rates and a faster pace of currency appreciation. This won’t stop inflation moving higher in the next few months, but the cumulative impact of policy measures over the last six months should start to have an impact later in the year.”
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