PBOC Warns on Imported Inflation, Focuses on Policy Transmission

China’s central bank has warned on the risks of imported inflation from higher oil prices stemming from the war in Iran, offering no hint of preparing to ease policy as it looks to ensure that its interest rates reach the economy.

“Recent geopolitical events in the Middle East have driven up prices of international crude oil and some commodities, which has contributed to the rebound of China’s price indicators,” the People’s Bank of China said in its quarterly monetary policy report released Monday. “But the impact of imported inflation on the domestic economy needs to be closely monitored.”