* China Premier Wen reiterates interest rate, yuan reforms
* Says to quicken development of private financial firms
(Adds more quotes and background)
BEIJING Jan 21 China will push forward
market-based reforms on interest rate systems as well as on the
currency regime, state radio quoted outgoing Premier Wen Jiabao
as saying on Monday.
Wen's remarks, which reaffirmed the official stance, came
after the central bank launched a new short-term liquidity tool
in its open market operations, which analysts say could help its
gradual move towards a market-based interest rate regime.
"We will steadily push forward market-based liberalisation
of interest rate and improve the renminbi (yuan) exchange rate
formation mechanism, while expanding the international use of
of renminbi to gradually realise capital account convertibility
of the currency," Wen was quoted as saying during a visit to the
Wen also pointed to the challenges faced by China's
financial sector and called for the prevention of financial
risks to maintain stability.
Wen's remarks followed a promise by the central bank to
quicken the pace of reforming and opening up the financial
sector this year, while preventing systemic risks.
Beijing will also quicken the development of private
financial institutions and deepen market-based innovations to
build up a modern financial system.
China's central bank announced last Friday it would launch a
new short-term liquidity tool and permit 12 primary dealers to
bid for bond repurchase agreements. Traders would be allowed to
bid on a daily basis.
The central bank has been gradually liberalising bank
lending and deposit rates in recent years.
It has pledged to keep its "prudent" monetary policy this
year while maintaining appropriate credit growth.
(Reporting by Aileen Wang and Kevin Yao; Editing by Simon
Cameron-Moore and Ron Popeski)