Beijing would like to delay tightening monetary policy until it gets a clearer read of the property market and the fallout from euro-area weakness, economists said.
China has kept rates on hold, preferring more targeted administrative measures to curb the property speculation and to curtail bank lending that have fanned inflation.
The measures appear to be working. Property prices slowed in May from April while banks issued 639.4 billion yuan in new loans in May, down from the previous month. New yuan lending in May was less than the 774 billion yuan extended in April.
Initial market jitters that China’s economy, now a prime engine of global recovery, could be hit hard by the European debt crisis eased after data released on Thursday showed its exports soared 48.5 percent year-on-year in May on strong foreign demand for Chinese products.
While Beijing was expected to keep rates and other tightening measures on hold for now, strong exports meant a revaluation of the yuan was likely in the coming months, analysts said.
But, any reform on yuan revaluation will be done in keeping with China’s timing, they said.
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This was novel. I wish I could read every post, but i have to go back to work now… But I’ll return.