China central bank stresses price controls

BEIJING, Jan. 31 (UPI) -- China, battling inflation, will tighten efforts to keep overall prices under control this year through prudent monetary policy, the country's central bank said.

"Controlling overall price levels will be higher up the agenda in 2011, while the financial system should be kept secure and sound," Xinhua reported the People's Bank of China said on its Web site late Sunday.

China's December consumer price index, the key measure of inflation, rose 4.6 percent from the same month of 2009.

Though lower than November's jump of 5.1 percent -- the highest in two years -- the December rate was still far higher than the government target of 3 percent. Inflation for all of 2010 was 3.3 percent.

As part of its tightening efforts to control rising prices, rein in excess liquidity and avert risk bubbles, the central bank already has raised interest rates twice and upped bank reserve requirement ratios several times since the beginning of last year.

The bank said it expects the country's money supply of cash in circulation and deposits to grow 16 percent year on year in 2011, down from 19.7 percent last year.