Inflation accelerates in China. Consumer prices increased by 5,5% year-on-year in May. It is the biggest leap forward since July 2008. A few hours after the publication of the data, the Central Bank announced a half point increase in the cash reserve ratio which, with effect from 20 June next, will stand at the record level of 21,5, XNUMX%.
In April, the consumer price index had recorded a +5,3%. Meanwhile, producer prices grew by 6,8% in May, the same rate as in April. Chinese banks granted fewer loans than expected in May and money supply growth slowed to its lowest pace in thirty months. These are two effects of the monetary tightening policy adopted by Beijing to contain inflation.
