Downside risks to Chinese economic growth have eased. The People’s Bank of China is expected to begin easing policy less aggressively after property prices grew sharply and loan growth accelerated strongly in Q1, noted ANZ.

Out of 70 cities in China, 61 cities recorded a monthly rise in property prices in March 2016. The Chinese government is expected to continue attempting to avoid a property bubble as local property prices are quite unaffordable for people living in cities.

China’s central bank is expected to restrict the degree of credit growth in the economy in the future, according to ANZ. In the first quarter, mortgage lending grew by RMB 1 trillion, accounting for 22% of the total new loans.

The central bank, apart from continue to remain accommodative and try to keep low interest rates, will also set up conventional measures such as lowering the reserve requirement ratio less often, added ANZ. Meanwhile, the focus will be shifted to high frequency instruments such as MLF, reverse repo and SLO in the near term.