China will continue to use monetary instruments to maintain macro-economic stability, the governor of China's central bank said on Thursday.

"We will keep using monetary policy instruments and may consider other instruments to maintain macro-economic stability in China," President of the People's Bank of China Zhou Xiaochuan told the press.

The press conference followed the closing of the annual board meetings of the African Development Bank on Thursday.

Zhou noted China's macro-economic stability is very important both for the nation and for its impact on the world economy.

In March, China's central bank raised the interest rate by 0.27 percent, which Zhou said helps "deal with economic development and inflationary pressure."

On the exchange rate, Zhou said the Chinese government has already mentioned very clearly that "we are gradually moving toward a more flexible exchange rate."

The general policy is "managing the floating exchange rate regime in reference to a basket of currencies and based on the supply-demand relationship in our foreign exchange market," he said.

"I'm sure that the Chinese exchange rate will become more and more flexible and reflect supply-demand forces in the market more closely," he said.

(Xinhua News Agency May 18, 2007)