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China won't consider more rate cuts until Q4 data is out - official

Tomohiro Ohsumi | Bloomberg | Getty Images

China's central bank will wait until fourth-quarter economic data is out and monitor U.S. and Japanese monetary policy before considering any more rate cuts or easing, a central bank adviser said on Tuesday.

The People's Bank of China surprised the markets by cutting rates last Friday for the first time in more than two years to help stabilize the world's second-largest economy. Reuters then reported that China was prepared to ease policy again.

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"Regarding the next step, whether to cut rates again or take similar action, we still need to look at the fourth quarter's macroeconomic index," said Chen Yulu, who sits on the central bank's monetary policy committee. He was speaking on the sidelines of an economy and finance forum in Beijing.

"It is also important to make decisions taking into account Japanese and U.S. monetary policy," Chen said.

He added that he didn't believe that Friday's benchmark lending rate cuts represented a change in monetary policy, echoing the central bank line.

Prior to Friday's moves, Beijing and the central bank had persisted with modest stimulus measures.

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Reuters reported that the country's leadership and central bank were prepared to cut rates again and loosen lending restrictions on concerns that falling prices could trigger a surge in debt defaults, business failures and job losses, according to sources involved in policy-making.

Economic growth slowed to 7.3 percent in the third quarter and policymakers feared it was on the verge of dipping below 7 percent - a rate not seen since the global financial crisis. Producer prices, charged at the factory gate, have been falling for almost three years, piling pressure on manufacturers, and consumer inflation is also weak.

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Earlier on Tuesday, the central bank cut the yield for a key short-term money rate for the fourth time this year as regulators step up efforts to reduce funding pressure on Chinese companies.