China's central bank will "moderately" step up efforts to prevent the economy from overheating, the Financial News reported yesterday, citing Governor Zhou Xiaochuan.

The People's Bank of China will seek to maintain "reasonable" money and loan growth, stabilize inflation expectations and prevent negative real interest rates, the newspaper quoted Zhou as saying. The central bank will enhance co-ordination between interest-rate and exchange-rate policies, Zhou said without being specific. He reiterated that China will further improve the exchange-rate mechanism and increase the flexibility of the yuan.