“China has not seen deflation, no deflationary risks in the second half of 2023 (H2 2023),” per the latest comments from People’s Bank of China (PBoC) Deputy Governor Guoqiang Liu.
The PBoC official also mentioned that the Consumer Price Index (CPI) could decline further in July before improving in August.
“Central Bank has ample tools,” said PBoC Deputy Governor while adding that they will step up counter cyclical adjustments.
The policymaker also showed readings to increase support measures for key sectors while keeping credit growth appropriate.
USD/CNH stays pressured
Despite the mostly upbeat comments, USD/CNH remains pressured at the lowest levels in a month, down 0.07% intraday near 7.1460 by the press time.
Additional comments
After a slew of initial comments suggesting readiness for action, PBoC Deputy Governor Liu showed dislike for extreme levels of Yuan. The policymaker also conveyed his optimism for China economy while nullifying previous fears emanating from the nation’s downbeat exports by stating, “China's cross-border capital flows are basically balanced.”
Also read: USD/CNH struggles to cheer US Dollar weakness at monthly low past 7.1500 on mixed China news
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