BOC to raise annual inflation forecast for three quarter

Bank of China issued a recent report of the BOC analysis, said that the April C pi is expected to increase by 2.6%, to increase the 2010 C Pi year-on-year increase in anticipation to 3 3% to 3.5% level.　　Keeping the central bank expected to raise interest rates by 27 points in 3 quarters. The report said the CPI was expected to rise 2 per cent year-on-year in April. 6%. In terms of price changes in April, the Ministry of Commerce's Edible agricultural products price index fell by 0 in April, while the decline in the same period in the previous year was generally 1 5% to 1.6%, with prices falling much lower in April 2010 than in previous years, indicating that inflation trends continued to rise. Food prices, food prices received policy-led 6 consecutive months of rising, edible oil, egg prices in the Spring festival after the seasonal decline, and pork prices began to stabilise. The price of refined oil will be reflected in the April non-food Class C pi.　　We expect food CPI fell 0.3% to 0 per cent on a month-on-month basis. 5%, non-food category C pi is expected to rise 0.1% to 0.2%, the estimated April CPI year-on-year growth will be slightly up to 2.5% to 2.6%,c Pi will usher in a rapid rise in the 2 quarter.　　BOC believes that the rapid rebound in capacity gap, M 1-quarter growth over the expected rebound, will be in the 2 to 3 quarters continue to push up C pi quarter-on-quarter growth, the 3 quarter may usher in the fastest price trend of the period, C P I have a hyper-expected risk, increase 2010 C Pi Year-on-year increase in expectations to 3.3% to 3.5% level. Monetary policy controls on inflation expectations and asset bubbles could start at the end of the 2 quarter to 3 quarters, the report said. The wording of the central bank's April 23 announcement was changed to "should continue to strengthen liquidity management, maintain moderate growth in monetary credit, strive to stabilize the overall price level", and the wording of the March 31 announcement "to keep the liquidity of the banking system reasonably abundant and to guide the amount of monetary credit to moderate growth" has changed markedly　　This shows a preliminary realization of the credit control target, but the wording of liquidity management is tightening and the tendency of inflationary pressure is increasing. BOC believes that as banks face regulatory targets, the 2-quarter credit growth will fall spontaneously and the central bank's regulatory targets for credit scale are easier to reach, so the central bank has not yet taken the liquidity tightening measures to further increase the reserve requirement ratio. But, on the basis of rising inflation expectations of the current population, as the asset bubble is so serious, we expect the central bank to still have the potential to adjust its expectations by raising the rate of return on the issue, which is being diverted by the renminbi's exchange rate, which is expected to emerge later in the 2 quarter, while maintaining the central bank's expectation of a 27-point rate hike in 3