UPDATE 1-China c.bank needs time to decide policy tweaks

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BEIJING, March 5 (Reuters) - The People's Bank of China will adjust policy to meet the government's 3 percent inflation target for 2010 but needs more time to decide whether to raise interest rates, senior central bank officials said on Friday

"We have many ways to control prices, including liquidity controls," Su Ning, a deputy PBOC governor, said on the sidelines of the opening of the National People's Congress (NPC), the largely ceremonial parliament.

Yi Gang, another deputy governor and head of the State Administration of Foreign Exchange, said distortions caused by the long Lunar New Year holiday last month made it tough to get a clear reading of the economy.

Asked whether the PBOC would wait until the second half of the year to raise interest rates, Yi said: "We need to wait and see."

Yi thought that March data would provide more clarity. "We need more time to observe," he said.

Su brushed aside international demands that the yuan's exchange rate be allowed to resume its climb.

"We are facing some external pressure, as everybody can see," Su said. "China can handle all its own affairs very well."

Beijing has frozen the currency against the dollar since mid-2008 to help its exporters, provoking complaints from abroad that China is reaping an unfair competitive advantage.

Some economists have speculated that Beijing might permit a one-off revaluation of the yuan, but Su repeatedly sidestepped questions on the issue.

Premier Wen Jiabao, in his report to the NPC, reaffirmed that Beijing would seek to keep the currency basically steady at a reasonable and balanced level. (Reporting by Langi Jiang and Simon Rabinovitch; Editing by Alan Wheatley and Ken Wills)