Bank of China Chairman Says Central Bank Has Begun Tightening Monetary Policy

China’s central bank was described as having begun tightening monetary policy, a former deputy governor of the People’s Bank of China said in an interview. The comments by Xiao Gang, currently chairman of Bank of China (one of the country’s four major state-run commercial banks) were published in the May 25 issue of economic magazine Caijing, according to Nikkei. It is not clear the PBoC would agree with his characterization, which contrasts with the stated policy of monetary easing, though the central bank has maintained interest rates steady since Decmber after having cut rates 5 times beginning last September. Gang noted that PBoC has started absorbing liquidity in the banking system by increasing issuance of central bank bills in April. He said "interest rates are still high when you consider that year-on-year changes in consumer prices move in negative territory, “and “there are no signs that the PBoC is moving to bring rates down.”