China Sees No Need to Change Prudent Monetary Policy, Hu Says

China’s decision to cut interest rates was triggered by rising real interest rates and does not signal a change in the central bank’s prudent monetary policy, said a deputy governor Hu Xiaolian.

Rising real interest rates caused by lower inflation had become a “problem,” prompting the People’s Bank of China to lower borrowing costs, Hu said at a forum in Beijing today. She is the first central bank official to speak publicly since the 0.4 percentage point cut in the benchmark one-year lending rate was announced Nov. 21.