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FILE PHOTO: Headquarters of the People’s Bank of China (PBOC), the central bank, is pictured in Beijing, China September 28, 2018. REUTERS/Jason Lee

BEIJING (Reuters) – China’s central bank will base the pace and intensity of monetary policy on the domestic economy and inflation trends in the second half of the year, Sun Guofeng, head of the monetary policy department at the bank said on Tuesday.

The producer price index (PPI) is expected to hover at an elevated level in the second and third quarters, before falling back in the fourth quarter, said Sun.

Reporting by Shen Yan, Stella Qiu and Ryan Woo, Editing by Louise Heavens