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PBOC Vows Coronavirus Won’t Cause Large Price Rises in China

PBOC Vows Coronavirus Won’t Cause Large Price Rises in China

(Bloomberg) -- The coronavirus outbreak in China is putting pressure on price stability because production has been delayed but it will not lead to large-scale inflationary pressures, according to China’s central bank.

The People’s Bank of China’s stance is unchanged and it will maintain prudent monetary policy, Deputy Governor Fan Yifei said at a press conference in Beijing Saturday. The central bank is confident the effects of the outbreak can be dealt with and that the economy can be kept stable, and it urged investors to avoid irrational sentiments in financial markets, according to a statement released before the briefing.

PBOC Vows Coronavirus Won’t Cause Large Price Rises in China

Chinese consumer prices rose the fastest in January in more than eight years, with the outbreak of the coronavirus and subsequent shutdowns of transport links across the country making further gains in the coming months likely. The shutdown of much of the economy will affect both demand and supply, as many companies and people are still not back at work.

Financial regulators will adjust rules on non-performing loans to allow some increase, according to Fan. The banking regulator announced Friday that banks could keep loans that have gone bad due to the virus outbreak off their books for a grace period.

To contact Bloomberg News staff for this story: Yinan Zhao in Beijing at yzhao300@bloomberg.net

To contact the editors responsible for this story: Jeffrey Black at jblack25@bloomberg.net, Stanley James, Jake Lloyd-Smith

©2020 Bloomberg L.P.

With assistance from Bloomberg