The Shanghai Securities News quoted Wu as saying at a domestic seminar in the southern city of Guangzhou that China's money supply data for March showed the country's recent steps to curb credit growth had proved to be effective.

"With liquidity being tightened constantly, I believe future credit growth will slow further," Wu was quoted as saying.

Annual growth in China's broad M2 money supply eased to 17.3 percent in March from 17.8 percent in February, the central bank said on Thursday. The median forecast of 14 economists polled by Reuters was for a 17.5 percent rise.

The central bank has slowed M2 growth from a peak of 19.2 percent in January 2006 by raising banks' required reserves six times and interest rates three times in the past year.

Wu also said the latest surge in China's foreign exchange reserves was due to the country's trade surplus and the repatriation of foreign currency proceeds raised by Chinese enterprises, including state banks, through huge overseas stock sales.

It was also caused by currency swaps conducted between the central bank and commercial banks, she said.

China's foreign exchange reserves rose by US$135.7 billion in the first quarter, taking the world's biggest reserve stockpile to US$1.202 trillion, the central bank announced.

The increase was US$73.37 billion more than the US$62.33 billion sum of China's trade surplus and foreign direct investment in that period.

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