Thu, May 12, 2011 - Page 10 News List

China inflation rate eases

COOLING ECONOMY:Data for last month suggest that the Chinese economy is cooling, which would take some pressure off Chinese officials to tighten monetary policy

Reuters, BEIJING

“Therefore, we must not underestimate the situation and keep making it the priority to control price rises,” Sheng added.

Chinese policymakers have made it clear they will deploy the currency as a weapon to deal with the inflationary impact of rising commodity prices, although they also worry that faster yuan rises could hurt exporters and fuel hot money inflows.

Sheng highlighted Beijing’s dilemma on the currency.

“Theoretically, the appreciation of one currency may help ease imported inflation pressure, but currency appreciation is a double-edged sword, which should be used depending on different conditions,” he said.

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