China: When Will Monetary Tightening End?

Posted March 14, 2011 by CLeahey

[private]The most recent Chinese data show new loans declining sharply in the first two months of the year, bringing the rate of growth of total loans close to the “normal” pace experienced prior to the global crisis.

This is an important development in terms of the policy outlook. When coupled with the apparent (although still tentative) stabilization of headline CPI inflation at near 5% and the steady moderation of house-price inflation, it points towards a very significant likelihood that the central bank may be in a position to enter at least a temporary pause possibly in the third quarter of 2011—if not earlier.
3-14-11–EMG INDICATORS AND INSIGHTS _China’s Money_
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