China Acts After Inflation Rises |
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April 15, 2011
China has imposed strict price controls on basic consumer items and is expected to allow faster appreciation of its currency in the coming months after annual inflation in the country reached its highest level in nearly three years in March.
China has imposed strict price controls on basic consumer items and is expected to allow faster appreciation of its currency in the coming months after annual inflation in the country reached its highest level in nearly three years in March.
In a speech this week to the governing State Council, Chinese Premier Wen Jiabao said Beijing would, along with other policy measures, "further improve the yuan exchange rate mechanism and increase yuan exchange rate flexibility to eliminate inflationary monetary conditions".
Analysts said this was the first time Mr Wen had publicly and explicitly mentioned the renminbi exchange rate as a tool for fighting inflation, and this reference meant Beijing was likely to allow faster appreciation to counter rising global prices of oil and other commodities.
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