SHANGHAI (Reuters) – Policymakers will have more room to fine tune monetary policy and money supply growth will likely be slower in the second half of 2016, the state-owned China Securities Journal said in a commentary Tuesday.
At the same time, the nation’s economy will still require fiscal support, the paper said.
Consumer price inflation already reflects the impact of liquidity injected into the economy over the past half year, the paper said, while further price increases are likely to be limited in the second half of the year.
The paper said the central bank is likely to rely on open market operations and its medium-term lending facility monetary tools to maintain stable liquidity conditions. And current liquidity conditions mean money market repurchase agreement rates have room to fall further.
(Reporting By Nathaniel Taplin; Editing by Sam Holmes)