“For the People’s Bank of China to win the battle over inflation, it will have to slow money growth,” says Sanford C. Bernstein & Co. in a note obtained by Bloomberg. Bernstein’s analysts expect the annual new loan target to be 6.5 trillion yuan to 7.5 trillion yuan through 2015.
According to Bloomberg, China’s inflation accelerated to 4.4% last month, the fastest pace in two years, bolstering the case for the policy makers to do more to soak up liquidity and cool the economy.
Citing central bank data, Bloomberg says Chinese banks have advanced about 6.9 trillion yuan of new loans this year, nearing the government’s cap of 7.5 trillion yuan for 2010.
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