The central bank has denied media reports that China will buy up to $200 billion worth of U.S. treasuries to help Washington combat the deepening financial crisis.

Bai Li, spokesman for the People's Bank of China, said that "it is the first time I have ever heard about such rumors".

According to Hong Kong media reports, China will initially spend $70-80 billion to buy U.S. treasury bonds.

Bai said the official stance has been published on the central bank's website, which did not mention any such purchase.

The statement merely said China welcomes Washington's $700 billion bailout plan; and will cooperate with the international community to ensure financial security.

In another development, central bank governor Zhou Xiaochuan said Monday the bank views a stable currency and job creation as priorities.

In a statement on the bank's website, Zhou said that "the priority is to address questions such as how to keep a stable currency value, how to effectively promote employment and support consumption growth".

China's annualized economic growth slowed to 10.1 percent in the second quarter, down from 11.9 percent for the whole of last year.

Analysts expect the central bank to further relax monetary policy in the coming months after it cut benchmark lending rates and reduced the proportion of money banks must set aside in reserves.

(China Daily October 7, 2008)