Monetary scene unlikely to tighten now

Inflation concerns will not have a major bearing on policies, say experts

Policymakers are unlikely to tighten monetary policies in China despite rising inflation concerns due to the US central bank's dovish attitude toward its ultraloose monetary policy, experts said on Monday.

A stronger rise in China's producer prices in April, indicated by the year-on-year jump of producer price index to 6.8 percent from 4.4 percent in March, has put the monetary policy in spotlight, with concerns that the People's Bank of China, the central bank, may tighten monetary policy amid rising global inflation concerns.

But experts believe that the higher PPI inflation will not be a compelling factor causing PBOC to raise interest rates or constrain credit growth. If there is some inflation pressure on Chinese policymakers, it may be largely imported from overseas, triggered by global factors such as demand stimulus in major developed economies and a shortage in raw material supply due to the lingering novel coronavirus cases, said Wu Ge, chief economist of Changjiang Securities.