PBOC’s Warning on Inflation Signals Policy Easing May Be Limited

The People’s Bank of China warned inflation may accelerate as overall demand in the economy picks up, suggesting the scope for further monetary policy easing may be limited.

The central bank “will pay serious attention to the underlying possibility of rising inflation, especially changes in the demand side,” it said in its quarterly monetary policy report released late Wednesday. At the same time, the PBOC said it will increase support for the economy and keep liquidity reasonably ample.