China reported higher inflation last month as food prices rose ahead of the winter and producer prices jumped on a coal price rally, dampening expectations that the central bank may increase money supply to boost growth.
The consumer price index grew 2.1 per cent year-on-year in October, accelerating from 1.9 per cent a month earlier, the National Bureau of Statistics said on Wednesday. Food prices, up 3.7 per cent, were the main factor behind the rise. The price of vegetables and pork jumped 13 per cent and 4.8 per cent.
“Consumer prices have some upward pressure in the short term, but overall are stable,” the central bank said in its third-quarter monetary policy implementation report released on Tuesday, vowing to closely monitor the issue.
The producer price index, whose impact is usually passed on to consumer goods several months later, rose 1.2 per cent last month. It ended a 54-month decline by climbing 0.1 per cent year-on-year in September, thanks to the rebound of international commodity prices and a recovery in the Chinese economy.
The Politburo shifted its emphasis on economic policy to curb financial risks and asset bubbles at a meeting late last month.
The central bank said on Tuesday that it would stick to “neutral and appropriate” monetary policy.
China’s foreign exchange watchdog on Wednesday lowered the yuan midpoint to 6.7832 against the US dollar from 6.7838. The yuan was trading at 6.7827 at 9.50 am on Wednesday in China.