PBOC governor stresses price stability

BEIJING -- China will look to stabilize prices in its monetary policies to strike a balance between economic growth and inflation control, according to the governor of the central bank Tuesday.

Zhou Xiaochuan, governor of the People's Bank of China, made the comments in a business forum "Jinqilin" hosted by Internet portal Sina.

He said the bank should keep a watch on the overall price level in order to handle the relationship between economic stimulation, price steadiness and financial risk controls.

The PBOC has moved cautiously to loosen its monetary policy in response to the economic downturn this year, as it is wary of refueling inflation and fanning up housing prices that are still high.

It has reduced interest rates and the reserve requirement ratio for lenders twice this year, but has refrained from further cuts since July.

Official data showed that China's CPI grew 1.7 percent year-on-year in October, the slowest pace since January 2010.

However, analysts have forecast the CPI will gradually pick up.

At the forum, Zhou urged the use of more market-based tools to maintain a "reasonable" social financing scale to avoid drastic ups and downs in economic expansion.

Noting the complications and challenges in macro-controls, Zhou called for deeper financial reforms and the creation of innovative tools to improve the effectiveness of monetary policies.

Regarding reforms in liberalizing exchange rates, Zhou said China will push forward this trend step by step.

Zhou also said China will seek a proper time to open its capital account.