"One consideration to improve financial services this year is to gradually make the local currency exchangeable in order to clear up some of the economic restrictions in terms of convertibility of different currencies," the official China Securities Journal quoted central bank governor Zhou Xiaochuan as saying.

Zhou remained elusive, however, on the timetable and the details of the long-awaited adjustment to the forex regime under which the yuan is pegged at around 8.28 to the US dollar.

The process of making the yuan convertible will be "comparatively stable," Zhou said, adding: "We'll have to wait and see" on other potential economic policies and measures Beijing may consider.

Although China has long said it wants to make its foreign exchange regime more flexible, analysts said Zhou's remarks were likely part of a broader attempt to ease revaluation pressures after a sharp rise in foreign currency reserves in 2004.

The reserves soared to a record 609.9 billion dollars from 403.3 billion dollars at the end of 2003, largely a result of a burgeoning trade surplus and strong fund inflows, some of it from speculative investors betting Beijing would allow the yuan to appreciate.

"In a word, this is to relieve revaluation pressure," said Wang Zhao, researcher from the Development Research Center of China's State Council.

"Now that the (foreign exchange reserve) figure is out they are starting to get concerned about it," Zhao said.

"The more than 50 percent growth is far too much to be ignored so the figure is there and the pressure (for currency adjustment) is there."

As China's economy has boomed it has quickly accumulated the world's largest foreign reserves after Japan, forcing the central bank to mop up excess cash in the banking system to ease upward pressure on the yuan.