The People's Bank of China (PBOC) said it will protect the economy from the threat of inflation by pledging to refrain from massive stimulus measures and excessive money printing to stimulate growth.
The central bank also warned of rising structural inflationary pressure in the short term and import inflationary pressure is expected to remain.
The PBOC's warning came on the same day official data showed inflation rose faster in July to 2.7%, a two-year high largely driven by food prices.
However, weak consumer demand has helped keep overall price pressures in check.
In the meantime, the PBOC predicts that consumer inflation may exceed 3% in some months in the second half of the year.
Economists said that while the central bank's warning did not signal a tightening of monetary policy, there was little expectation of significant easing in the coming months.
Goldman Sachs Group Inc. the PBOC's focus is on short-term inflationary pressures and the way it implements policy shows it is likely to continue its stance on loose and accommodative monetary policy.
