PBOC Vice Governor: Controlling Inflation Still Primary Objective -State Radio

BEIJING--Keeping inflation in check remains the Chinese central bank's primary objective, state radio reported Monday, citing People's Bank of China Vice Gov. Yi Gang.

"At this stage of China's development, I would hope that keeping inflation at a modest level is the central bank's primary objective," Mr. Yi was quoted as saying.

"The central bank will continue to keep inflation at a relatively low level," he added.

Inflation in China is likely to accelerate this year, but the central bank is still confident it can keep price rises under control, Mr. Yi said Sunday on the sidelines of the opening session of the Chinese People's Political Consultative Conference, a government advisory body.

The central bank official told reporters Sunday that the country's consumer price index will likely rise by around 3.0% this year, up from a 2.6% advance in 2012.

Authorities will steadily push forward with interest-rate liberalization, Mr. Yi said in the state radio report, adding that the process needs time.

"It is not possible that (interest-rate liberalization) can be achieved immediately," he said in the report.

While he didn't elaborate, regulators have been concerned that interest-rate liberalization could cut into bank profits and possibly push some of the nation's smaller banks into financial trouble. China currently has no deposit insurance but it has plans to create such a system to protect depositors in the event of a bank failure.

The CPPCC, which opened its annual session on Sunday, meets alongside the nation's legislature, which opens its session on Tuesday.

Write to Liyan Qi at liyan.qi@dowjones.com

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