China central bank reiterates need for prudent policy

BEIJING (BestGrowthStock) – China’s central bank took aim at inflation once again on Monday by saying prudent monetary policy in the world’s second-biggest economy will be helpful in combating price pressures and asset bubbles.

In a statement on the central bank’s website, Hu Xiaolian, a deputy governor, said China had been normalizing policy and will explore new ways to manage excess cash, which is seen as a major driver behind 28-month high inflation.

Hu’s remarks came two days after China’s central bank caught investors off guard by raising benchmark deposit and lending rates by 25 basis points on Christmas Day, its second rate rise in just over two months.

(Reporting by Langi Chiang, Aileen Wang and Koh Gui Qing; Editing by Simon Rabinovitch)

China central bank reiterates need for prudent policy