Zhou Xiaochuan: CPI presents just as expected

Director of the People’s Bank of China, Zhou Xiaochuan said yesterday CPI in February increased by 2.7 percent year on year, almost reaching the forecast made by the central bank. Su Ning, the deputy director, said the same day it saw  no pressure of inflations at present, the rise of CPI was due to the rush purchasing in the Spring Festival happened in February.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Analysts say it’s because of food and housing prices that push the ups of CPI by 2.7 percent, exceeding one-year deposit rate.

Data from the National Bureau of Statistics shows, PPI has increased 5.4 percent compared the same period, which is lifted up mainly by the price of nonferrous metals and the fuel-power cost.

The central bank says it added new loans in February by 700.1 billion yuan, down by half of last month issuance. The total loans in the first two months decreased by 600.0 billion yuan, analysts say it sees the result of macro-control. It appears the loans are mainly pumped to the state-owned institutions with 508.8 billion yuan ups at the very month. Whereas bill financing decreased by 174.4 billion, but increases seen for individual loans 199.4 billion yuan, 250.8 billion less than last month.

Money supply falls heavily, M2 dipped  by 0.56 percentage points despite the slightest ups of 25.52 percent to the last month, while M1 down by 3.97 points at ups of 34.99 percent. All this is happened during the Spring Festival as the fall of current deposits caused by the producers.  The inverted price scissors has been narrowed to 9.47 points the very month. Analysis indicates it will see fine-tune operation to macro-controlling, that in March deposit reserve rate could be increased and it’s unlikely to add interest rate in the first quarter.