The People's Bank of China (PBC) is concerned about inflationary pressure and is ready to make use of a range of monetary policy tools to curb prices rises, a senior official said yesterday.

 

"The central bank is firm on keeping inflation under control," Yi Gang, assistant governor of the PBC, told reporters at a fiscal forum in Beijing.

 

"We have many tools at hand," Yi added.

 

China has seen its consumer price index (CPI) exceed the benchmark line of 3 percent set by the central bank - in May, it hit a two-year high of 3.4 percent, after reaching 3 percent in April.

 

People have been expecting the central bank to raise interest rates or take other tightening measures to rein in rising prices.

 

The central bank will make proper use of the tools to control inflation and keep price levels and economic growth stable, Yi said.

 

He added that increased asset prices would not be a factor in taking tightening measures.

 

"We are mainly concerned with inflation, which mainly means CPI in China," he said.

 

In the long run, the central bank aims to keep real interest rates positive, Yi said.

 

(China Daily June 28, 2007)