Last Friday, the Chinese central bank that expansionary monetary policy in developed economies, even more upward pressure on commodity prices and the impact of dollars this year and inflation will boost demand for gold as a safe haven.
In a report which warned that the performance of the examination of financial markets, Bank of China also facing a deepening crisis of European debt, though its general outlook was optimistic.
“We expect the global economy continued its recovery and that the foundations for recovery are stronger,” said the detailed report.
About risks, the agency said China’s concerns monetary policy in Europe debt, inflation and the possibility of the emergence of a bubble in emerging markets. The bank also stressed that the dollar, the euro will underperform.
“In 2011, the dollar is bearish, because of slower economic recovery, low interest rates and a budget deficit and trade balance,” the bank said. “The possible spread of European government bonds crises and geopolitical risks could increase the value of the dollar at certain times,” he added.
He noted that developed countries remain free with an expansionary monetary policy and global liquidity, drive up the price of raw materials, notably oil and grain continue and that inflation, demand for gold as a safe haven asset support.
The agency also said that interest rates would rise gradually in the short term in large economies such as the recovery strengthens.
“But because the pace of global recovery is not strong, the increase would not be too high,” he said.
As regards goods, the bank informed that developed countries were to print money, improve their economies and raise prices without failure.