Inflation battle set to redouble

Customers choose tomatoes at a supermarket in Beijing. Analysts said that the faster-than-expected growth in money supply and lending may aggravate the country's already high inflationary pressure and prompt policymakers to adopt more monetary-tightening measures. [Photo / China Daily]

Growth in money supply, lending deepens concerns over rising prices

BEIJING - China's bank lending and money supply accelerated at a faster-than-expected pace in March. That's exacerbating policymakers' concerns about excess liquidity in the world's second-largest economy, where inflation is expected to accelerate at its fastest pace since 2008.

New yuan-denominated loans stood at 679.4 billion yuan ($104 billion) in March, while the country's broad money supply (M2) rose 16.6 percent from a year earlier to reach 75.8 trillion yuan. The figure exceeds the whole-year target of 16 percent set by the People's Bank of China (PBOC) at the beginning of this year, a statement on the central bank's website showed on Thursday.

Analysts said that the faster-than-expected growth in money supply and lending may aggravate the country's already high inflationary pressure and prompt policymakers to adopt more monetary-tightening measures. Tackling inflation has become the biggest economic priority for the Chinese government.