PBOC: Will monitor and make appropriate responses to keep price level stable
In the latest Q3 Monetary Policy Report published on its website, the People's Bank of China (PBOC) said it “will monitor the potential for rising inflation, especially changes on the demand side, and continue to consolidate the favorable conditions for increasing domestic grain production and smooth operation of the energy market, and make appropriate responses to keep the price level basically stable.”
Additional takeaways
“Will increase the intensity of prudent monetary policy instead of issuing excessive currency, strengthen cross-cycle adjustment to balance short-term and long-term needs, economic growth and price stability, as well as the internal and external environment.”
“Will also adhere to the market's decisive role in the formation of the exchange rate, strengthen expectations management, and maintain the basic stability of the yuan at a reasonable and balanced level.”
Market reaction
As investors digest the PBoC Monetary Policy Report and a weak setting of the yuan fix, USDCNY is advancing 0.40% on the day to extend the rebound from two-month lows of 7.0248. The pair is rising to near 7.1200, at the time of writing.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
